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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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    2. Breuer, Wolfgang & Müller, Torbjörn & Sachsenhausen, Eric, 2022. "The determinants of discounting in intergenerational decision-making," European Economic Review, Elsevier, vol. 148(C).
    3. Islam, Marco, 2022. "Intertemporal Prosocial Choice: The Inconsistency Puzzle," Working Papers 2022:12, Lund University, Department of Economics.
    4. James Andreoni & Marta Serra-Garcia, 2021. "The Pledging Puzzle: How Can Revocable Promises Increase Charitable Giving?," Management Science, INFORMS, vol. 67(10), pages 6198-6210, October.
    5. Besancenot, Damien & Vranceanu, Radu, 2021. "The generosity spillover effect of pledges in a two-person giving game," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 90(C).
    6. Christian Kellner & David Reinstein & Gerhard Riener, 2017. "Conditional generosity and uncertain income: Evidence from five experiments," Discussion Papers 1707, University of Exeter, Department of Economics.
    7. John A. List & James J. Murphy & Michael K. Price & Alexander G. James, 2019. "Do Appeals to Donor Benefits Raise More Money than Appeals to Recipient Benefits? Evidence from a Natural Field Experiment with Pick.Click.Give," NBER Working Papers 26559, National Bureau of Economic Research, Inc.
    8. Florian Ederer & Fr'd'ric Schneider, 2018. "The Persistent Power of Promises," Cowles Foundation Discussion Papers 2129R, Cowles Foundation for Research in Economics, Yale University, revised May 2019.
    9. Fosgaard, Toke R. & Soetevent, Adriaan R., 2022. "I will donate later! A field experiment on cell phone donations to charity," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 549-565.
    10. Lata Gangadharan & Philip J. Grossman & Nina Xue, 2022. "Stepping Stone: Identifying self-image concerns from motivated beliefs: Does it matter how and whom you ask?," Monash Economics Working Papers 2022-05, Monash University, Department of Economics.
    11. Lata Gangadharan & Philip J. Grossman & Nina Xue, 2021. "Identifying self-image concerns from motivated beliefs: Does it matter how and whom you ask?," Monash Economics Working Papers 2021-17, Monash University, Department of Economics.
    12. Jawad, Muhammad & Naz, Munazza, 2023. "Environmental change through financial innovation: A systematic analysis of Program-Related donations," Technological Forecasting and Social Change, Elsevier, vol. 191(C).
    13. Damien Besancenot & Radu Vranceanu, 2019. "Pledges as a Social Influence Device: Experimental Evidence," Working Papers hal-02176269, HAL.
    14. Marius A. K. Ring & Thor Olav Thoresen, 2022. "Wealth Taxation and Charitable Giving," CESifo Working Paper Series 9700, CESifo.
    15. Heger, Stephanie A. & Slonim, Robert, 2022. "Giving begets giving: Positive path dependence as moral consistency," Journal of Economic Behavior & Organization, Elsevier, vol. 204(C), pages 699-718.
    16. Stephanie A. Heger & Robert Slonim, 2022. "Altruism Begets Altruism," CESifo Working Paper Series 9522, CESifo.
    17. Gangadharan, Lata & Grossman, Philip J. & Xue, Nina, 2023. "Using willingness to pay to measure the strength of altruistic motives," Economics Letters, Elsevier, vol. 226(C).
    18. Kirsten Rohde & Job van Exel & Merel van Hulsen, 2022. "Weighting the Waiting: Intertemporal Social Preferences," Tinbergen Institute Discussion Papers 22-023/I, Tinbergen Institute.
    19. Lorenz Götte & Egon Tripodi, 2022. "Social Recognition: Experimental Evidence from Blood Donors," CESifo Working Paper Series 9719, CESifo.

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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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