A Note on the Theory of Charitable Fund‐raising: The Role of Refunds

Paul Pecorino () and Akram Temimi

Journal of Public Economic Theory, 2001, vol. 3, issue 3, 341-345

Abstract: Andreoni (1998, Journal of Political Economy106, 1186–1213) shows that a small amount of seed money from the government can generate substantial additional private donations toward the provision of a public good, when there is a threshold level of provision below which no benefits are achieved. We argue that Andreoni's solution can be extended to a mechanism where refunds are possible. We then argue that a greater “bang per buck” may be achieved if the seed money is targeted to cover the administrative costs of providing refunds.

Date: 2001
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