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Delegating Altruism: Toward an Understanding of Agency in Charitable Giving

Luigi Butera and Daniel Houser ()

No 1060, Working Papers from George Mason University, Interdisciplinary Center for Economic Science

Abstract: Philanthropy, and particularly ensuring that ones giving is effective, can require substantial time and effort. One way to reduce these costs, and thus encourage greater giving, could be to encourage delegation of giving decisions to better-informed others. At the same time, because it involves a loss of agency, delegating these decisions may produce less warm-glow and thus reduce one’s charitable impulse. Unfortunately, the importance of agency in charitable decisions remains largely unexplored. In this paper, using a laboratory experiment with real donations, we shed light on this issue. Our main finding is that agency, while it does correlate with self-reported warm-glow, nevertheless seems to play a small role in encouraging giving. In particular, people do not reduce donations when giving decisions are made by (costly) algorithms that guarantee efficient recipients. Moreover, we find participating in giving groups a weaker form of delegation is also effective in that they are appealing to donors who would not otherwise make informed donations, and thus improves overall effective giving. Our results suggest that one path to promoting effective giving may be to create institutions that facilitate delegated generosity.

Keywords: Altruism; Laboratory Experiment; Agency; Charitable Giving (search for similar items in EconPapers)
JEL-codes: C9 D64 D71 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-exp, nep-net and nep-soc
Date: 2016-06
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Persistent link: http://EconPapers.repec.org/RePEc:gms:wpaper:1060

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