Searching to avoid regret in charitable giving

Tanushree Jhunjhunwala ()
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Tanushree Jhunjhunwala: Universitat Ramon Llull, ESADE Business School

Journal of the Economic Science Association, 2023, vol. 9, issue 2, No 4, 207-226

Abstract: Abstract Regret aversion often compels individuals to undertake extensive searches before making a choice. Yet, donors hardly search among charitable alternatives prior to giving. It is unclear if donors search little because there is no regret to avoid as they rarely learn the outcome of their donations, or they simply do not care as donation outcomes do not directly impact them. To investigate if absence of regret is a contributing factor behind this lack of search, the current study develops an online experiment wherein subjects can research available charities before donating. While the control group does not receive any regret-inducing feedback (such as relative effectiveness of their donation) ex-post of decision-making, the treatment group is ex-ante aware of receiving charity rankings ex-post. While the control subjects donate without gathering information on charities, the treatment subjects research substantially more and consequentially donate to better ranked charities without decreasing donations.

Keywords: Regret; Feedback; Charitable giving (search for similar items in EconPapers)
JEL-codes: C99 D64 D83 D91 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s40881-023-00138-2

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