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(Un)Informed charitable giving

  • Krasteva, Silvana
  • Yildirim, Huseyin
Registered author(s):

    Evidence suggests little informed giving. To understand this behavior, we examine voluntary provision of a discrete public good with independent private values that can be ascertained at a cost. We find that an individual who considers a smaller contribution is less likely to learn her value, and thus the percentage of informed giving diminishes as the population grows. We also find that a direct grant to the charity exacerbates crowding-out by discouraging information acquisition whereas a matching grant increases donations by encouraging it. We further show that with costly information, a (first-order) stochastic increase in values can decrease donations; and that facilitating private acquisition of information can be a better fund-raising strategy than directly supplying it.

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    Article provided by Elsevier in its journal Journal of Public Economics.

    Volume (Year): 106 (2013)
    Issue (Month): C ()
    Pages: 14-26

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    Handle: RePEc:eee:pubeco:v:106:y:2013:i:c:p:14-26
    Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505578

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