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Charity as a Signal of Trustworthiness


  • Fehrler, Sebastian

    () (University of Konstanz)


Being perceived as trustworthy comes with substantial economic benefits in many situations. Making other people think you are a trustworthy person may, therefore, be an important motive for charity and other forms of prosocial behavior, provided these activities work as signals of trustworthiness. This paper shows that donating money to an NGO substantially raises the other players' beliefs about the donors’ trustworthiness in a simple trust game. Consequently, donors receive higher transfers. The magnitude of these benefits is substantial.

Suggested Citation

  • Fehrler, Sebastian, 2010. "Charity as a Signal of Trustworthiness," IZA Discussion Papers 5299, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp5299

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    More about this item


    trustworthiness; charity; signaling; trust;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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