Economic Irrationality of the Donator Arising from his Low Confidence in Donation Recipient
AbstractThis paper tries to address the problem of donator?s efficiency. In spite of the fact, that social services and public goods are not fully determined by market forces, they are not beyond the subject of economics. The state or other donator can allocate grants among recipients either efficiently or inefficiently. In the paper the authors demonstrate the idea, that if a donator does not trust in grant recipients and states too strict limits for them, he/she risks the lower allocation efficiency. Two models are analyzed: one in which postponing of grant funds to the next budget period is not allowed and second with maximum of allowed portion for overhead cost. It is shown that such limits could be contra-productive as far as the initial donator?s aim (maximization of the probability of survival of the recipients) is concerned.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Charles University Prague, Faculty of Social Sciences in its journal Finance a uver - Czech Journal of Economics and Finance.
Volume (Year): 54 (2004)
Issue (Month): 3-4 (March)
generalised microeconomic criterion of economic agent; mathematical models of economic behaviour; allocation efficiency of grant system; rational donator problem; prisoners dilema;
Find related papers by JEL classification:
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
- D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy
- D3 - Microeconomics - - Distribution
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lenka Herrmannova).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.