Limiting the number of charities

Pierre Pestieau and Motohiro Sato

No 2006074, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: We consider a model where creating a charity implies a fixed cost and individual contributions depend on how close donors feel with respect to the charity. In that setting we show that there are an optimal number of charities and an optimal rate of subsidization that depend on the set-up cost and on the attachment of donors to charities that share the same values as theirs. We also consider the case of free-entry and compare it with the second-best solution controlling for the number of charities.

Keywords: charities; joy of giving (search for similar items in EconPapers)
JEL-codes: H41 L31 (search for similar items in EconPapers)
Date: 2006-09
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2006074

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