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Inter-charity competition under spatial differentiation: Sorting, crowding, and splillovers

Author

Listed:
  • Carlo Gallier

    (ZEW - Leibniz Centre for European Economic Research)

  • Timo Goeschl

    (Heidelberg University)

  • Martin Kesternich

    (University of Kassel)

  • Johannes Lohse

    (University of Birmingham)

  • Christiane Reif

    (Frauenhofer Institute for Microstructure of Materials and Systems IMWS)

  • Daniel Roemer

    (Kreditanstalt fuer Wiederaufbau (KfW),)

Abstract

We study spatially differentiated competition between charities by partnering with two foodbanks in two neighboring cities to conduct a field experiment with roughly 350 donation appeals. We induce spatial differentiation by varying the observability of charities' location such that each donor faces a socially close 'home' and a distant 'away' charity. We find that spatially differentiated competition is characterized by sorting, crowding-in, and an absence of spill-overs: Donors sort themselves by distance; fundraising (through matching) for one charity raises checkbook giving to that charity, irrespective of distance; but checkbook giving to the unmatched charity is not affected. For lead donors, this implies that the social distance between donors and charities is of limited strategic important. For spatially differentiated charities, matching 'home' donations maximizes overall charitable income. Across both charities, however, the additional funds raised fail to cover the cost of the match, despite harnessing social identity for giving.

Suggested Citation

  • 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.
  • Handle: RePEc:bir:birmec:19-08
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    Cited by:

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    More about this item

    Keywords

    mispricing; online secondary market; peer-to-peer lending; belief dispersion;
    All these keywords.

    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • H4 - Public Economics - - Publicly Provided Goods

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