Transaction costs, the Opportunity Cost of Time and Inertia in Charitable Giving

Stephen Knowles () and Maroš Servátka

No 1401, Working Papers from University of Otago, Department of Economics

Abstract: We conduct a laboratory experiment to analyze the effect transactions costs and inertia have on charitable giving. We conjecture that transaction costs will have a greater effect on donations if the solicitation is received when the opportunity cost of time is high. Inertia could become a factor if people intend to give, but postpone making the payment until they have more time, and having postponed making the donation once, keep doing so. We find evidence of a transaction cost effect, with the size of this effect depending on the opportunity cost of time, but no statistically significant inertia effect.

Keywords: charitable giving; dictator game; transaction costs; opportunity cost of time; inertia (search for similar items in EconPapers)
JEL-codes: C91 D64 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2014-01, Revised 2014-01
New Economics Papers: this item is included in nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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http://www.otago.ac.nz/economics/news/otago078304.pdf First version, 2014 (application/pdf)

Related works:
Working Paper: Transaction Costs, the Opportunity Cost of Time and Inertia in Charitable Giving (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:otg:wpaper:1401

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