Charity as a Signal of Trustworthiness

Sebastian Fehrler ()

No 5299, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Being perceived as trustworthy comes with substantial economic benefits in many situations. Making other people think you are a trustworthy person may, therefore, be an important motive for charity and other forms of prosocial behavior, provided these activities work as signals of trustworthiness. This paper shows that donating money to an NGO substantially raises the other players' beliefs about the donors’ trustworthiness in a simple trust game. Consequently, donors receive higher transfers. The magnitude of these benefits is substantial.

Keywords: trustworthiness; charity; signaling; trust (search for similar items in EconPapers)
JEL-codes: C72 C92 H41 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2010-11
New Economics Papers: this item is included in nep-cbe, nep-ltv and nep-soc
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Charity as a Signal of Trustworthiness (2010)
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