Are Donors Afraid of Charities’ Core Costs? Scale Economies in Non-profit Provision and Charity Selection
Sarah Sandford and
Additional contact information
Ganna Pogrebna: Warwick Manufacturing Group, University of Warwick
Sarah Sandford: London School of Economics
CAGE Online Working Paper Series from Competitive Advantage in the Global Economy (CAGE)
We study contestability in non-profit markets where non-commercial providers supply a homogeneous collective good or service through increasing-returns-to-scale technologies. Unlike in the case of for-profit markets, in the non-profit case the absence of price-based sales contracts between providers and donors means that fixed costs are directly relevant to donors, and that they can translate into an entry barrier, protecting the position of an inefficient incumbent; or that, conversely, they can make it possible for inefficient newcomers to contest the position of a more efficient incumbent. Evidence from laboratory experiments show that fixed cost driven trade-offs between payoff dominance and perceived risk can lead to inefficient selection.
Keywords: Not-for-profit Organizations; Entry; Core Funding (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-exp and nep-ger
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
http://www2.warwick.ac.uk/fac/soc/economics/resear ... /201-2014_scharf.pdf
Working Paper: Are Donors Afraid of Charities' Core Costs? Scale Economies in Non-profit Provision and Charity Selection (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:cge:wacage:201
Access Statistics for this paper
More papers in CAGE Online Working Paper Series from Competitive Advantage in the Global Economy (CAGE) Contact information at EDIRC.
Bibliographic data for series maintained by Jane Snape ().