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Donors Change Both Their Level and Pattern of Giving in Response to Contests among Charities

Author

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  • Cary Deck

    (University of Alabama
    Chapman University)

  • James J. Murphy

    (Department of Economics, University of Alaska Anchorage)

Abstract

This paper examines two previously unexplored techniques for increasing charitable giving, both motivated by the contest literature. One is a fixed bonus that is paid to the organization receiving the most donations, akin to an all-pay auction. The other is a raffle-based bonus, akin to a Tullock contest. These two techniques are compared to a one-to-one matching program and a baseline condition in a within-subject laboratory experiment. The results reveal that all three bonus techniques lead to similar increases in donations to organizations eligible for the promotion. However, when only some organizations are eligible, the increases in giving to eligible organizations are primarily driven by a reallocation of donations away from ineligible organizations.

Suggested Citation

  • Cary Deck & James J. Murphy, 2018. "Donors Change Both Their Level and Pattern of Giving in Response to Contests among Charities," Working Papers 2018-06, University of Alaska Anchorage, Department of Economics.
    • Handle: RePEc:ala:wpaper:2018-06
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    Cited by:

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    2. Gallier, Carlo & Goeschl, Timo & Kesternich, Martin & Lohse, Johannes & Reif, Christiane & Römer, Daniel, 2019. "Inter-charity competition under spatial differentiation: Sorting, crowding, and spillovers," ZEW Discussion Papers 19-039, ZEW - Leibniz Centre for European Economic Research.
    3. Jan Schmitz, 2021. "Is Charitable Giving a Zero-Sum Game? The Effect of Competition Between Charities on Giving Behavior," Management Science, INFORMS, vol. 67(10), pages 6333-6349, October.
    4. Zhiyuan Gao & Zhiling Guo & Qian Tang, 2022. "How do monetary incentives influence giving? An empirical investigation of matching subsidies on kiva," Information Systems and e-Business Management, Springer, vol. 20(2), pages 303-324, June.
    5. Eckel, Catherine & Guney, Begum & Uler, Neslihan, 2020. "Independent vs. Coordinated Fundraising: Understanding the Role of Information," European Economic Review, Elsevier, vol. 127(C).
    6. Livingston, Jeffrey A. & Rasulmukhamedov, Rustam, 2023. "On the Interpretation of Giving in Dictator Games When the Recipient is a Charity," Journal of Economic Behavior & Organization, Elsevier, vol. 208(C), pages 275-285.

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    More about this item

    Keywords

    experimental economics; Charitable Giving; Contests; All-pay Auction; Donation Matching; Laboratory Experiment; philanthropy;
    All these keywords.

    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • D6 - Microeconomics - - Welfare Economics
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise
    • H4 - Public Economics - - Publicly Provided Goods

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