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Inter-charity competition under spatial differentiation: Sorting, crowding, and splillovers

Carlo Gallier, Timo Goeschl (), Martin Kesternich (), Johannes Lohse, Christiane Reif and Daniel Roemer
Additional contact information
Carlo Gallier: ZEW - Leibniz Centre for European Economic Research
Christiane Reif: Frauenhofer Institute for Microstructure of Materials and Systems IMWS
Daniel Roemer: Kreditanstalt fuer Wiederaufbau (KfW),

Discussion Papers from Department of Economics, University of Birmingham

Abstract: We study spatially differentiated competition between charities by partnering with two foodbanks in two neighboring cities to conduct a field experiment with roughly 350 donation appeals. We induce spatial differentiation by varying the observability of charities' location such that each donor faces a socially close 'home' and a distant 'away' charity. We find that spatially differentiated competition is characterized by sorting, crowding-in, and an absence of spill-overs: Donors sort themselves by distance; fundraising (through matching) for one charity raises checkbook giving to that charity, irrespective of distance; but checkbook giving to the unmatched charity is not affected. For lead donors, this implies that the social distance between donors and charities is of limited strategic important. For spatially differentiated charities, matching 'home' donations maximizes overall charitable income. Across both charities, however, the additional funds raised fail to cover the cost of the match, despite harnessing social identity for giving.

Keywords: mispricing; online secondary market; peer-to-peer lending; belief dispersion (search for similar items in EconPapers)
JEL-codes: C9 D7 H4 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2019-08
New Economics Papers: this item is included in nep-exp and nep-ure
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Working Paper: Inter-charity competition under spatial differentiation: Sorting, crowding, and spillovers (2019) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:bir:birmec:19-08

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