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Learning by Fund-raising

  • Alvaro Jose Name

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    From experience, fund-raisers learn to become more efficient solicitors. This paper incorporates fund-raising technology into the theory of charitable giving. A full characterization of the solicitation strategy that maximizes donations net of fund-raising costs is provided. The strategy identi.es a fundraiser incentive to invest in learning by soliciting some early donors who would give less than their solicitation costs. A notion of “excessive” fund-raising is introduced. It is shown that this may worsen with learning. Our model also accomodates a technology with overhead costs. An extension with rising solicitation costs is also considered.

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    File URL: http://e-archivo.uc3m.es/bitstream/handle/10016/18862/we1408.pdf?sequence=1
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    Paper provided by Universidad Carlos III, Departamento de Economía in its series Economics Working Papers with number we1408.

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    Date of creation: May 2014
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    Handle: RePEc:cte:werepe:we1408
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    1. Roberts, Russell D, 1984. "A Positive Model of Private Charity and Public Transfers," Journal of Political Economy, University of Chicago Press, vol. 92(1), pages 136-48, February.
    2. Jonathan Meer & Harvey S. Rosen, 2009. "The ABCs of Charitable Solicitation," NBER Working Papers 15037, National Bureau of Economic Research, Inc.
    3. O'Donoghue, Ted & Rabin, Matthew, 1997. "Doing It Now or Later," Department of Economics, Working Paper Series qt7t44m5b0, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    4. Romano, Richard & Yildirim, Huseyin, 2001. "Why charities announce donations: a positive perspective," Journal of Public Economics, Elsevier, vol. 81(3), pages 423-447, September.
    5. Glazer, Amihai & Konrad, Kai A, 1996. "A Signaling Explanation for Charity," American Economic Review, American Economic Association, vol. 86(4), pages 1019-28, September.
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    7. Patrick Bolton & Christopher Harris, 1999. "Strategic Experimentation," Econometrica, Econometric Society, vol. 67(2), pages 349-374, March.
    8. Rose-Ackerman, Susan, 1982. "Charitable Giving and "Excessive" Fundraising," The Quarterly Journal of Economics, MIT Press, vol. 97(2), pages 193-212, May.
    9. Alvaro J. Name-Correa & Huseyin Yildirim, 2013. "A Theory of Charitable Fund-Raising with Costly Solicitations," American Economic Review, American Economic Association, vol. 103(2), pages 1091-1107, April.
    10. C. Lanier Benkard, 2000. "Learning and Forgetting: The Dynamics of Aircraft Production," American Economic Review, American Economic Association, vol. 90(4), pages 1034-1054, September.
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    15. McAfee, R Preston & Schwartz, Marius, 1994. "Opportunism in Multilateral Vertical Contracting: Nondiscrimination, Exclusivity, and Uniformity," American Economic Review, American Economic Association, vol. 84(1), pages 210-30, March.
    16. Ilya Segal, 1999. "Contracting With Externalities," The Quarterly Journal of Economics, MIT Press, vol. 114(2), pages 337-388, May.
    17. Roberts, Russell D, 1987. "Financing Public Goods," Journal of Political Economy, University of Chicago Press, vol. 95(2), pages 420-37, April.
    18. Yörük, BarIs K., 2009. "How responsive are charitable donors to requests to give?," Journal of Public Economics, Elsevier, vol. 93(9-10), pages 1111-1117, October.
    19. Morgan, John, 2000. "Financing Public Goods by Means of Lotteries," Review of Economic Studies, Wiley Blackwell, vol. 67(4), pages 761-84, October.
    20. Vesterlund, Lise, 2003. "The informational value of sequential fundraising," Journal of Public Economics, Elsevier, vol. 87(3-4), pages 627-657, March.
    21. John A. List, 2011. "The Market for Charitable Giving," Journal of Economic Perspectives, American Economic Association, vol. 25(2), pages 157-80, Spring.
    22. Argote, L. & Epple, D., 1990. "Learning Curves In Manufacturing," GSIA Working Papers 89-90-02, Carnegie Mellon University, Tepper School of Business.
    23. A. M. Spence, 1981. "The Learning Curve and Competition," Bell Journal of Economics, The RAND Corporation, vol. 12(1), pages 49-70, Spring.
    24. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-58, December.
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