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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. Carlo Gallier & Timo Goeschl & Martin Kesternich & Johannes Lohse & Christiane Reif & Daniel Roemer, 2019. "Inter-charity competition under spatial differentiation: Sorting, crowding, and splillovers," Discussion Papers 19-08, Department of Economics, University of Birmingham.
    3. Tatyana Deryugina & Benjamin M. Marx, 2021. "Is the Supply of Charitable Donations Fixed? Evidence from Deadly Tornadoes," American Economic Review: Insights, American Economic Association, vol. 3(3), pages 383-398, September.
    4. Eckel, Catherine & Guney, Begum & Uler, Neslihan, 2020. "Independent vs. Coordinated Fundraising: Understanding the Role of Information," European Economic Review, Elsevier, vol. 127(C).

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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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