Economic Irrationality of the Donator Arising from his Low Confidence in Donation Recipient

Jiøí Hlaváèek and Michal Hlaváèek
Authors registered in the RePEc Author Service: Michal Hlaváček

Czech Journal of Economics and Finance (Finance a uver), 2004, vol. 54, issue 3-4, 138-154

Abstract: This paper tries to address the problem of donator?s efficiency. In spite of the fact, that social services and public goods are not fully determined by market forces, they are not beyond the subject of economics. The state or other donator can allocate grants among recipients either efficiently or inefficiently. In the paper the authors demonstrate the idea, that if a donator does not trust in grant recipients and states too strict limits for them, he/she risks the lower allocation efficiency. Two models are analyzed: one in which postponing of grant funds to the next budget period is not allowed and second with maximum of allowed portion for overhead cost. It is shown that such limits could be contra-productive as far as the initial donator?s aim (maximization of the probability of survival of the recipients) is concerned.

Keywords: generalised microeconomic criterion of economic agent; mathematical models of economic behaviour; allocation efficiency of grant system; rational donator problem; prisoners dilema (search for similar items in EconPapers)
JEL-codes: D3 D61 D64 H2 (search for similar items in EconPapers)
Date: 2004
References: Add references at CitEc
Citations:

Downloads: (external link)
http://journal.fsv.cuni.cz/storage/967_03_138-154.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fau:fauart:v:54:y:2004:i:3-4:p:138-154

Access Statistics for this article

More articles in Czech Journal of Economics and Finance (Finance a uver) from Charles University Prague, Faculty of Social Sciences Contact information at EDIRC.
Bibliographic data for series maintained by Natalie Svarcova ().