Article
"Giving" in to Social Pressure
Games and Economic Behavior
(2016)
Abstract
We develop a theory of charitable giving in which donors feel social pressure from a
direct solicitation. We show that equilibrium donations are concentrated around a social
norm. Despite a higher level of the public good, relatively poor and/or low altruism givers
fare worse under social pressure and would avoid the solicitor at a cost. Aggregate donor
welfare improves to the extent that the added social motive alleviates the underprovision of
the public good; however, overprovision may result. Our theory therefore predicts a lighthanded
regulation for charitable solicitations, which is consistent with their exemption from
the popular Do Not Call list in the U.S. We further show that contrary to pure altruism,
a more equal income distribution may produce more of the public good. In fundraising
campaigns where a social norm is not apparent, one may emerge endogenously if donors
are not too heterogeneous.
Keywords
- Altruism,
- social pressure,
- charitable giving
Disciplines
Publication Date
2016
Citation Information
Alvaro J. Name-Correa and Huseyin Yildirim. ""Giving" in to Social Pressure" Games and Economic Behavior Vol. 99 (2016) p. 99 - 116 Available at: http://works.bepress.com/huseyin_yildirim/26/