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Brothers in alms ? Coordination between nonprofits on markets for donations

Author

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  • Gani Aldashev

    () (Department of Economics and CRED, University of Namur)

  • Marco A. Marini

    () (Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza")

  • Thierry Verdier

    () (Paris School of Economics and CEPR)

Abstract

Mission-driven nonprofit organizations compete for donations through fundraising activities. Such competition can lead to inefficient outcomes, if nonprofits impose externalities on each others' output. This paper studies the sustainability of fundraising coordination agreements, using a game-theoretic model of coalition formation. Three key characteristics determine the stability of cooperation: (i) the alliance formation rule, (ii) the extent to which fundraising efforts are strategic complements/substitutes, and (iii) whether deviation from the agreements is by an individual or by a group of nonprofits. We analyze how the interaction between these three features induces (or not) the stability of Pareto-optimal full coordination in fundraising.

Suggested Citation

  • Gani Aldashev & Marco A. Marini & Thierry Verdier, 2014. "Brothers in alms ? Coordination between nonprofits on markets for donations," DIAG Technical Reports 2014-02, Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza".
  • Handle: RePEc:aeg:report:2014-02
    as

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    References listed on IDEAS

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    1. Ray, Debraj, 2007. "A Game-Theoretic Perspective on Coalition Formation," OUP Catalogue, Oxford University Press, number 9780199207954.
    2. Susan Rose-Ackerman, 1982. "Charitable Giving and “Excessive†Fundraising," The Quarterly Journal of Economics, Oxford University Press, vol. 97(2), pages 193-212.
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    5. Philip Brown & Jessica Minty, 2006. "Media Coverage & Charitable Giving After the 2004 Tsunami," William Davidson Institute Working Papers Series wp855, William Davidson Institute at the University of Michigan.
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    Citations

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    Cited by:

    1. Federica VIGANO & Andrea SALUSTRI, 2015. "Matching profit and Non-profit Needs: How NPOs and Cooperative Contribute to Growth in Time of Crisis. A Quantitative Approach," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 86(1), pages 157-178, March.
    2. repec:eee:eecrev:v:96:y:2017:i:c:p:48-61 is not listed on IDEAS
    3. Astrid SIMILON, 2015. "Self-Regulation Systems for NPO Coordination: Strenghts and Weaknesses of Label and Umbrella Mechanisms," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 86(1), pages 89-104, March.
    4. Krasteva, Silvana & Yildirim, Huseyin, 2016. "Information, competition, and the quality of charities," Journal of Public Economics, Elsevier, vol. 144(C), pages 64-77.
    5. Gani Aldashev & Marco Marini & Thierry Verdier, 2017. "Samaritan Bundles: Inefficient Clustering in NGO Projects," Working Papers 6/17, Sapienza University of Rome, DISS.
    6. Gani Aldashev & Cecilia Navarra, 2017. "Development NGOs: Basic Facts," Working Papers ECARES ECARES 2017-36, ULB -- Universite Libre de Bruxelles.

    More about this item

    Keywords

    nonprofits; charitable giving; coordination; endogenous coalition formation; non-distribution constraint.;

    JEL classification:

    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • L44 - Industrial Organization - - Antitrust Issues and Policies - - - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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