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Time inconsistent charitable giving

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  • Andreoni, James
  • Serra-Garcia, Marta

Abstract

We usually assume purchasers of commodities experience utility at the point of transacting a purchase, when money and ownership are exchanged. With charitable giving, the social rewards from giving can begin being enjoyed the moment a decision to give has been made. Later, when the gift is transacted, the donor can again experience utility from giving and seeing their donations at work. We show both theoretically and experimentally that these early flows of social utility can generate time inconsistent charitable giving. A fundraiser can get more donations (50 percent more in our Experiment 1) by allowing a donor to decide now to give later. We develop a theoretical model of social utility gained through social image concerns, and in two additional experiments examine its implications for commitment demand and test the model predictions for how charities can manipulate information to influence time inconsistent charitable giving.

Suggested Citation

  • Andreoni, James & Serra-Garcia, Marta, 2021. "Time inconsistent charitable giving," Journal of Public Economics, Elsevier, vol. 198(C).
  • Handle: RePEc:eee:pubeco:v:198:y:2021:i:c:s004727272100027x
    DOI: 10.1016/j.jpubeco.2021.104391
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    Cited by:

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    More about this item

    Keywords

    Prosocial behavior; Charitable giving; Image concerns; Intertemporal choice;
    All these keywords.

    JEL classification:

    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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