Efforts and morals in markets: experimental evidence on technology choice and voluntary donations

Académique ou spécialiste
27.02.2024 16:15 - 17:30

Abstract: In this paper, we provide theoretical and experimental insights into how the observability of donation decisions may affect the incentives to initially generate income. Subjects can choose between a ``clean'' and a ``harmful'' technology with the latter generating a larger personal income at the expense of imposing a negative externality on a preexisting charitable donation pool. Our results put a word of caution to calls for a larger transparency of prosocial behaviors as information on donation decisions can backfire: more subjects choose the harmful technology and only partially compensate for this through an increase in donations. Additionally providing information on the technology choice induces subjects to switch to the clean technology but lower their donations. In competitive environments that feature and increased share of subjects choosing the ``harmful'' technology, providing information on subsequent donations affects donation decisions, but has only minor and insignificant impact on the total payoff to charity as other margins of behavior adjust. We find that observability can attenuate the detrimental effects of competition on the charity's payoff.
27.02.2024 16:15 - 17:30
Site PER 21 / Salle D130
Bd de Pérolles 90, 1700 Fribourg
Département d'économie politique
Prof. Christelle Dumas et Mark Schelker
Andreas Lange, University of Hamburg