Why charities announce donations: A positive perspective

Charities frequently announce contributions of donors as they accrue. Doing so induces donors to play a sequential-move rather than simultaneous-move game. We examine the conditions under which a charity prefers such sequential play. It is known that if donors only value contributions through their effect on the total provision of a public good, then the charity will not announce contributions sequentially. However, with more general utility functions that include additional effects such as warm-glow or snob appeal, the charity may benefit from announcing contributions. © Elsevier Science S.A.

Duke Scholars

Author Huseyin Yildirim Economics