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A Coordination Game Model of Charitable Giving and Seed Money Effect

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  • Kentaro Hatsumi

Abstract

We point out that if potential donors for a charity project possess the warm-glow properties in their preferences, their behavior can be represented by a coordination game. Accordingly, we construct a simultaneous incomplete information game model of charitable giving on the basis of a simple global coordination game. We demonstrate that by considering the threshold shift effect of seed money exclusively, the proportion of donors and the total amount of donation strictly and continuously increase according to the amount of seed money. This result is quite compatible with the field experimental study of List and Lucking-Reiley [List, J. A., Lucking-Reiley, D., 2002. The Effects of Seed Money

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  • Kentaro Hatsumi, 2009. "A Coordination Game Model of Charitable Giving and Seed Money Effect," ISER Discussion Paper 0736, Institute of Social and Economic Research, The University of Osaka.
    • Handle: RePEc:dpr:wpaper:0736
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