Information, competition, and the quality of charities

Journal Article (Journal Article)

Drawing upon the all-pay auction literature, we propose a model of charity competition in which informed giving alone can account for the significant quality heterogeneity across similar charities. Our analysis identifies a negative effect of competition and a positive effect of informed giving on the equilibrium quality of charity. In particular, we show that as the number of charities grows, so does the percentage of charity scams, approaching one in the limit. In light of this and other results, we discuss the need for regulating nonprofit entry and conduct as well as promoting informed giving.

Full Text

Duke Authors

Cited Authors

  • Krasteva, S; Yildirim, H

Published Date

  • December 1, 2016

Published In

Volume / Issue

  • 144 /

Start / End Page

  • 64 - 77

International Standard Serial Number (ISSN)

  • 0047-2727

Digital Object Identifier (DOI)

  • 10.1016/j.jpubeco.2016.10.008

Citation Source

  • Scopus