(Un)Informed charitable giving

Journal Article

Evidence suggests little informed giving. To understand this behavior, we examine voluntary provision of a discrete public good with independent private values that can be ascertained at a cost. We find that an individual who considers a smaller contribution is less likely to learn her value, and thus the percentage of informed giving diminishes as the population grows. We also find that a direct grant to the charity exacerbates crowding-out by discouraging information acquisition whereas a matching grant increases donations by encouraging it. We further show that with costly information, a (first-order) stochastic increase in values can decrease donations; and that facilitating private acquisition of information can be a better fund-raising strategy than directly supplying it. © 2013 Elsevier B.V.

Full Text

Duke Authors

Cited Authors

  • Krasteva, S; Yildirim, H

Published Date

  • 2013

Published In

Volume / Issue

  • 106 /

Start / End Page

  • 14 - 26

International Standard Serial Number (ISSN)

  • 0047-2727

Digital Object Identifier (DOI)

  • 10.1016/j.jpubeco.2013.06.011