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Rational Nonprofit Entrepreneurship

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  • Marc Bilodeau

    (Dept d'Economique, Universite de Sherbrooke)

  • Al Slivinski

    (Dept of Economics, U of Western Ontario)

Abstract

This paper models nonprofit entrepreneurship as the equilibrium outcome of a multistage game among individuals who would like a public good to be provided.. The model predicts that if individuals will voluntarily contribute towards provision of the public good, then it is in the private interest of the entrepreneur to impose a non-distribution constraint on himself by founding a nonprofit firm. This decision also improves the allocation of resources, in the sense that it results in greater voluntary contributions than if the firm that provides the public good is proprietary.

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Bibliographic Info

Paper provided by EconWPA in its series Industrial Organization with number 9405001.

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Length: 35 pages
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Handle: RePEc:wpa:wuwpio:9405001

Note: 35 pages postscript file + 2 EPS diagrams
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References

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  1. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
  2. Sugden, Robert, 1982. "On the Economics of Philanthropy," Economic Journal, Royal Economic Society, vol. 92(366), pages 341-50, June.
  3. Rose-Ackerman, Susan, 1987. "Ideals versus Dollars: Donors, Charity Managers, and Government Grants," Journal of Political Economy, University of Chicago Press, vol. 95(4), pages 810-23, August.
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Cited by:
  1. Sabourin, David & Baldwin, John R. & Hanel, Peter, 2000. "Les determinants des activites d'innovation dans les entreprises de fabrication canadiennes : le role des droits de propriete intellectuelle," Direction des etudes analytiques : documents de recherche 2000122f, Statistics Canada, Direction des etudes analytiques.
  2. Christoph Starke & Steffen Burchhardt, 2014. "Revealing the Preferences of Social Financiers," FEMM Working Papers 140002, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
  3. Al Slivinski, 1999. "Team Incentives and Organizational Form," UWO Department of Economics Working Papers 9916, University of Western Ontario, Department of Economics.
  4. Petra Brhlikova & Andeas Ortmann, 2006. "The Impact of the Non-distribution Constraint and Its Enforcement on Entrepreneurial Choice, Price, and Quality," CERGE-EI Working Papers wp299, The Center for Economic Research and Graduate Education - Economic Institute, Prague.
  5. Ghatak, Maitreesh & Mueller, Hannes Felix, 2010. "Thanks for Nothing? Not-for-Profits and Motivated Agents," CEPR Discussion Papers 7663, C.E.P.R. Discussion Papers.
  6. Edward Nissan & Maria-Soledad Castaño & Inmaculada Carrasco, 2012. "Drivers of non-profit activity: a cross-country analysis," Small Business Economics, Springer, vol. 38(3), pages 303-320, April.
  7. Vesterlund, Lise, 2003. "The informational value of sequential fundraising," Journal of Public Economics, Elsevier, vol. 87(3-4), pages 627-657, March.
  8. Bilodeau, Marc & Slivinski, Al, 1997. "Rival charities," Journal of Public Economics, Elsevier, vol. 66(3), pages 449-467, December.
  9. Paul Makdissi & Cyril Téjédo, 2000. "Problèmes d’appariement et politique de l’emploi," Cahiers de recherche 00-04, Departement d'Economique de la Faculte d'administration à l'Universite de Sherbrooke.
  10. Ballou, Jeffrey P. & Weisbrod, Burton A., 2003. "Managerial rewards and the behavior of for-profit, governmental, and nonprofit organizations: evidence from the hospital industry," Journal of Public Economics, Elsevier, vol. 87(9-10), pages 1895-1920, September.

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