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The Size and Distribution of Donations: Effects of Numbers of Potential Recipients

  • Robin Hogarth and Emre Soyer
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    Whereas much literature exists on "choice overload," little is known about effects of numbers of alternatives in donation decisions. How do these affect both the size and distribution of donations? We hypothesize that donations are affected by the reputation of recipients and increase with their number, albeit at a decreasing rate. Allocations to recipients reflect different concepts of fairness - "equity" and "equality." Both may be employed but, since they differ in cognitive and emotional costs, numbers of recipients are important. Using a cognitive (emotional) argument, distributions become more uniform (skewed) as numbers increase. In a survey, respondents indicated how they would donate lottery winnings of 50 Euros. Results indicated that more was donated to NGO's that respondents knew better. Second, total donations increased with the number of recipients albeit at a decreasing rate. Third, distributions of donations became more skewed as numbers increased. We comment on theoretical and practical implications.

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    Paper provided by Barcelona Graduate School of Economics in its series Working Papers with number 517.

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    Date of creation: Sep 2015
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    Handle: RePEc:bge:wpaper:517
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    1. Craig Landry & Andreas Lange & John A. List & Michael K. Price & Nicholas G. Rupp, 2005. "Toward an Understanding of the Economics of Charity: Evidence from a Field Experiment," NBER Working Papers 11611, National Bureau of Economic Research, Inc.
    2. Martin, Richard & Randal, John, 2008. "How is donation behaviour affected by the donations of others?," Journal of Economic Behavior & Organization, Elsevier, vol. 67(1), pages 228-238, July.
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