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Do Market Incentives Crowd Out Charitable Giving?

Donations and volunteerism can be conceived as market transactions with zero explicit price. However, evidence suggests people may not view zero as just another price when it comes to pro-­social behavior. Thus, while markets might be expected to increase the supply of assets available to those in need, some worry such financial incentives will crowd out altruistic giving. This paper reports laboratory experiments directly investigating the degree to which market incentives crowd out charity. The results suggest markets increase the supply of assets available to those in need. However, as some critics fear, market incentives disproportionately influence the relatively poor.

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Paper provided by Department of Economics, Simon Fraser University in its series Discussion Papers with number dp13-05.

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Length: 24
Date of creation: Jun 2013
Date of revision:
Handle: RePEc:sfu:sfudps:dp13-05
Contact details of provider: Postal: Department of Economics, Simon Fraser University, 8888 University Drive, Burnaby, BC, V5A 1S6, Canada
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  12. Soetevent, Adriaan R., 2005. "Anonymity in giving in a natural context--a field experiment in 30 churches," Journal of Public Economics, Elsevier, vol. 89(11-12), pages 2301-2323, December.
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  15. Benabou, Roland & Tirole, Jean, 2005. "Incentives and Prosocial Behavior," IZA Discussion Papers 1695, Institute for the Study of Labor (IZA).
  16. Andreoni, James & Petrie, Ragan, 2004. "Public goods experiments without confidentiality: a glimpse into fund-raising," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1605-1623, July.
  17. Byrne, Margaret M. & Thompson, Peter, 2001. "A positive analysis of financial incentives for cadaveric organ donation," Journal of Health Economics, Elsevier, vol. 20(1), pages 69-83, January.
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