Endogenous production technology in a public goods enterprise

Douglas A. Norton and R. Isaac

A chapter in Charity with Choice, 2010, pp 131-163 from Emerald Group Publishing Limited

Abstract: Purpose – Motivated by new models of nonprofit organizations, we study a voluntary contributions environment in which the productivity of the public goods process is chosen endogenously by a manager. The experimental treatments incorporate two institutions of transparency in the organization, which we conjecture will assist the manager in achieving an outcome superior to the standard free-riding prediction. Methodology – The chapter uses the methodology of laboratory experimental economics. Findings – The findings demonstrate that transparency institutions can be important for assisting the manager and the stakeholders achieve relative stable and efficient outcomes. Limitations – We discuss obvious areas for further investigation including environments in which firm productivity is only stochastically related to the decisions of the manager. Practical and Social Implications – The chapter is oriented to real-world issues in the organization of nonprofit enterprises, which were a once ubiquitous and now re-emerging source of charitable activity. The chapter is written so that it should be accessible to informed practitioners in nonprofit organizations. Originality – The study of endogenous environments and institutions in the provision of charitable and public goods is a relatively new advance and is indeed the theme of Research in Experimental Economics, Volume 13, “Charity with Choice.”

Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:eme:rexezz:s0193-2306(2010)0000013008

DOI: 10.1108/S0193-2306(2010)0000013008

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