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Article
Information, Competition, and the Quality of Charities
Journal of Public Economics (2016)
  • Silvana Krasteva, Texas A & M University - College Station
  • Huseyin Yildirim, Duke University
Abstract
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.
Keywords
  • informed giving,
  • quality of charity,
  • competition,
  • all-pay auctions
Publication Date
December, 2016
Citation Information
Silvana Krasteva and Huseyin Yildirim. "Information, Competition, and the Quality of Charities" Journal of Public Economics Vol. 144 (2016) p. 64 - 77
Available at: http://works.bepress.com/huseyin_yildirim/27/