Avoiding Peer Information and Its Effects on Charity Crowdfunding: A Field Experiment

Tat Y. Chan (), Li Liao (), Xiumin Martin () and Zhengwei Wang ()
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Tat Y. Chan: Olin Business School, Washington University, St. Louis, Missouri 63117
Li Liao: People’s Bank of China School of Finance (PBCSF), Tsinghua University, Beijing 100083, China
Xiumin Martin: Olin Business School, Washington University, St. Louis, Missouri 63117
Zhengwei Wang: People’s Bank of China School of Finance (PBCSF), Tsinghua University, Beijing 100083, China

Management Science, 2024, vol. 70, issue 4, 2272-2293

Abstract: We study the behavior of an individual avoiding peer information from a natural field experiment of charity crowdfunding. The unique experimental design enables us to employ an instrumental variable strategy to identify how the behavior influences individual giving to and promotion of charity campaigns. We find that, even with free access, 89% of individuals chose not to seek peer information. These individuals were less likely, whereas their peers were more likely to give and help promote in the past. The behavior would reduce the total distribution of campaigns by 8.5% and the total donation amount by 7.7%. A stylized model is used to illustrate how the pressure from peer comparison drives the individuals not to seek the information and how this behavior could influence giving and promoting behaviors of a group of marginal individuals.

Keywords: information avoidance; charity giving; crowdfunding; peer comparison; behavioral economics; field experiment (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:70:y:2024:i:4:p:2272-2293

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