Rent extraction and prosocial behavior

Tobias Cagala, Ulrich Glogowsky, Veronika Grimm, Johannes Rincke and Amanda Tuset-Cueva

Munich Reprints in Economics from University of Munich, Department of Economics

Abstract: We present controlled experimental evidence on how rent extraction by an administrator affects giving to non-profit associations. Holding the price of giving constant, we compare contributions between two conditions: a rent extraction condition, in which an administrator can expropriate a part of the contributions and a control condition without rent extraction. We find that rent extraction strongly reduces average contributions. Studying the channels through which this effect operates, we demonstrate that rent extraction has situational spillovers, suggesting that it undermines the contributors' general preference for giving. In contrast, we do not find evidence for negative reciprocity towards the administrator. (C) 2019 Elsevier B.V. All rights reserved.

Date: 2019
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Citations: View citations in EconPapers (5)

Published in Journal of Economic Behavior & Organization 166(2019): pp. 709-723

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Journal Article: Rent extraction and prosocial behavior (2019)
Working Paper: Rent Extraction and Prosocial Behavior (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:lmu:muenar:78221

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