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Searching to avoid regret in charitable giving

Author

Listed:
  • Tanushree Jhunjhunwala

    (Universitat Ramon Llull, ESADE Business School)

Abstract

Regret aversion often compels individuals to undertake extensive searches before making a choice. Yet, donors hardly search among charitable alternatives prior to giving. It is unclear if donors search little because there is no regret to avoid as they rarely learn the outcome of their donations, or they simply do not care as donation outcomes do not directly impact them. To investigate if absence of regret is a contributing factor behind this lack of search, the current study develops an online experiment wherein subjects can research available charities before donating. While the control group does not receive any regret-inducing feedback (such as relative effectiveness of their donation) ex-post of decision-making, the treatment group is ex-ante aware of receiving charity rankings ex-post. While the control subjects donate without gathering information on charities, the treatment subjects research substantially more and consequentially donate to better ranked charities without decreasing donations.

Suggested Citation

  • Tanushree Jhunjhunwala, 2023. "Searching to avoid regret in charitable giving," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 9(2), pages 207-226, December.
    • Handle: RePEc:spr:jesaex:v:9:y:2023:i:2:d:10.1007_s40881-023-00138-2
    DOI: 10.1007/s40881-023-00138-2
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    References listed on IDEAS

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    More about this item

    Keywords

    Regret; Feedback; Charitable giving;
    All these keywords.

    JEL classification:

    • C99 - Mathematical and Quantitative Methods - - Design of Experiments - - - Other
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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