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Transactions Costs and Social Distance in Philanthropy: Evidence from a Field Experiment

Author

Listed:
  • Jonathan Meer

    () (Texas A&M University)

  • Oren Rigbi

    () (Ben-Gurion University of the Negev)

Abstract

The importance of various motivations for altruistic behavior is still an open question. We use data from a field experiment at Kiva, the online microfinance platform, to examine the role of transactions costs and social distance in philanthropy. Requests for loans are either written in English or another language, and our treatment consists of posting requests in the latter category with or without translation. We find evidence that relatively small transactions costs have a large effect on the share of funding coming from speakers of languages other than that in which the request was written. Social distance plays a smaller role in funding decisions. Additionally, our results demonstrate the importance of a lingua franca.

Suggested Citation

  • Jonathan Meer & Oren Rigbi, 2012. "Transactions Costs and Social Distance in Philanthropy: Evidence from a Field Experiment," Working Papers 1205, Ben-Gurion University of the Negev, Department of Economics.
  • Handle: RePEc:bgu:wpaper:1205
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    File URL: http://in.bgu.ac.il/en/humsos/Econ/Workingpapers/1205.pdf
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    References listed on IDEAS

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    Cited by:

    1. Chen, Roy & Chen, Yan & Liu, Yang & Mei, Qiaozhu, 2017. "Does team competition increase pro-social lending? Evidence from online microfinance," Games and Economic Behavior, Elsevier, vol. 101(C), pages 311-333.
    2. Moleskis, Melina & Canela, Miguel Ángel, 2016. "Crowdfunding Success: The Case Of Kiva.Org," IESE Research Papers D/1137, IESE Business School.

    More about this item

    Keywords

    Charitable Giving; Social Distance; Philanthropy; Translation; Transaction Costs; Microfinance;

    JEL classification:

    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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