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The demand for products linked to public goods: Evidence from an online field experiment

  • McManus, Brian
  • Bennet, Richard
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    We conduct a field experiment at a nonprofit organization's online store to study how demand changes when consumers' purchases can generate revenue for a charitable cause. When purchases can trigger a small donation by an outside anonymous group, consumers respond strongly and apparently without regard for the specific conditions that trigger the donation. Consumers respond similarly when the outside donation requires a personal donation which consumers generally decline. When the outside donations are relatively large, however, consumers appear to pay close attention to the trigger conditions, and increase their purchases only where needed to generate the outside donation. Overall, increasing the salience of financial incentives weakens consumers' positive responses to the outside group's donation pledges. We also present evidence that the donation pledges have positive long-term effects on demand and may reduce price sensitivity.

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

    Volume (Year): 95 (2011)
    Issue (Month): 5 ()
    Pages: 403-415

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    Handle: RePEc:eee:pubeco:v:95:y:2011:i:5:p:403-415
    Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505578

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    1. Stephan Meier, 2007. "Do Subsidies Increase Charitable Giving in the Long Run? Matching Donations in a Field Experiment," Journal of the European Economic Association, MIT Press, vol. 5(6), pages 1203-1222, December.
    2. Duncan, Brian, 1999. "Modeling charitable contributions of time and money," Journal of Public Economics, Elsevier, vol. 72(2), pages 213-242, May.
    3. Uri Gneezy & Aldo Rustichini, 2000. "Pay Enough Or Don'T Pay At All," The Quarterly Journal of Economics, MIT Press, vol. 115(3), pages 791-810, August.
    4. Dean Karlan & John A. List, 2006. "Does Price Matter in Charitable Giving? Evidence From a Large-Scale Natural Field Experiment," NBER Working Papers 12338, National Bureau of Economic Research, Inc.
    5. Daniel W. Elfenbein & Brian McManus, 2010. "A Greater Price for a Greater Good? Evidence That Consumers Pay More for Charity-Linked Products," American Economic Journal: Economic Policy, American Economic Association, vol. 2(2), pages 28-60, May.
    6. Chen Yan & Li Xin & MacKie-Mason Jeffrey K, 2005. "Online Fund-Raising Mechanisms: A Field Experiment," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(2), pages 1-39, December.
    7. Peter T. L. Popkowski Leszczyc & Michael H. Rothkopf (deceased), 2010. "Charitable Motives and Bidding in Charity Auctions," Management Science, INFORMS, vol. 56(3), pages 399-413, March.
    8. Eckel, Catherine C. & Grossman, Philip J., 2003. "Rebate versus matching: does how we subsidize charitable contributions matter?," Journal of Public Economics, Elsevier, vol. 87(3-4), pages 681-701, March.
    9. Strahilevitz, Michal & Myers, John G, 1998. " Donations to Charity as Purchase Incentives: How Well They Work May Depend on What You Are Trying to Sell," Journal of Consumer Research, University of Chicago Press, vol. 24(4), pages 434-46, March.
    10. Jeffrey MacKie-Mason & Xin Li & Yan Chen, 2006. "Online fund-raising mechanisms: A field experiment," Natural Field Experiments 00225, The Field Experiments Website.
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