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Does market size matter for charities?

Simon Lapointe (), Carlo Perroni, Kimberley Scharf and Janne Tukiainen ()

Journal of Public Economics, 2018, vol. 168, issue C, 127-145

Abstract: We analyze implications of market size for market structure in the charity sector. While a standard model of oligopolistic for-profit competition predicts a positive relationship between market size and firm size, our analogous model of competition between prosocially motivated charities predicts no such correlation. If charities are biased towards their own provision, a positive association between market size and provider size can arise. We examine these predictions empirically for six different local charity markets. Our empirical findings suggest that charities do not solely pursue prosocial objectives, and that increased competition in the charity sector can lead to rationalization in provision.

Keywords: Competition in charity sectors; Market structure (search for similar items in EconPapers)
JEL-codes: H41 L11 L13 L31 L33 (search for similar items in EconPapers)
Date: 2018
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