Charity without Altruism

Menahem Spiegel

Economic Inquiry, 1995, vol. 33, issue 4, 625-39

Abstract: In this paper, charity is considered as a strategic selfish activity that increases the welfare of the contributors without altruism. The model supposes the interactive simultaneous utility maximization of two consumer groups, contributors and recipients, who share the same utility function but differ in their incomes. It is shown that such charity can act to promote economic efficiency up to the Pareto optimal level. Conditions under which charitable contributions will emerge and their scale are derived and the limiting cases of the maximum joy of giving and the maximum benefit from receiving contributions are presented. Copyright 1995 by Oxford University Press.

Date: 1995
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