On Donations: Pure and Impure Altruism

Marta Faias and Emma Moreno‐García

Journal of Public Economic Theory, 2025, vol. 27, issue 4

Abstract: This paper examines donations to social causes, generating public good‐like externalities. Inspired by Bergstrom et al. (1986) and Andreoni (1989, 1990), our approach incorporates pure and impure altruism. We define an equilibrium notion, show an existence result, and its indeterminacy, which is real and comes from the decentralization of contributions by multiple private commodity bundles and how the aggregate and individual gifts enter the utility functions. In addition, we establish that the degree of indeterminacy of equilibrium prices increases with the number of private commodities. By adapting Andreoni's altruism index to our setting, we show that impure altruism can coexist with neutrality, highlighting the role of wealth in shaping perceptions of altruistic behavior.

Date: 2025
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