2016
DOI: 10.1016/j.jpubeco.2016.10.008
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Information, competition, and the quality of charities

Abstract: We propose a model of charity competition in which informed giving alone can explain quality heterogeneity across similar charities. It is this heterogeneity that also creates the demand for information. In equilibrium, too few donors pay to be informed; but interestingly, informed giving may increase with the cost of information. This is true if the charitable market is highly competitive or if private consumption is a strong substitute to giving -both of which are supported by evidence.

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Cited by 39 publications
(13 citation statements)
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“… Their donative behavior is thus the same as that of the purely mission‐oriented donors in Krasteva and Yildirim (). The other donors here could be viewed as needing a nudge in the form of persuasive advertising, face‐to‐face solicitation, etc., “asking” them to contribute.…”
mentioning
confidence: 71%
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“… Their donative behavior is thus the same as that of the purely mission‐oriented donors in Krasteva and Yildirim (). The other donors here could be viewed as needing a nudge in the form of persuasive advertising, face‐to‐face solicitation, etc., “asking” them to contribute.…”
mentioning
confidence: 71%
“…Krasteva and Yildirim () and Scharf () study competition between NGOs, but they focus on the implications for the quality of the organizations active in the sector, whereas we abstract from heterogeneity. Aldashev and Verdier () model fundraising by competing development NGOs, as we do.…”
Section: Motivation and Related Literaturementioning
confidence: 99%
“…Essa certificação, aparentemente, ainda gira em torno de um fator determinante e um fator consequente para a sua obtenção -o atendimento aos requisitos da Interpretação Técnica Geral (ITG) 2002 (CFC, 2012) e a contrapartida das imunidades tributárias, respectivamente (Beuren & Tamanini, 2009;Lima & Pereira, 2004). Contudo, trata-se de um segmento que envolve diversos stakeholders (Costa & Pesci, 2016;Grizzle & Sloan, 2016;Williams & Taylor, 2013), muita competição por recursos (Gordon, Knock, & Neely, 2009;Krasteva & Yildirim, 2016), pressões por desempenho, maior responsabilização pelos resultados (accountability) (Boateng, Akamavi, & Ndoro, 2016;Grieco, Michelini, & Iasevoli, 2015), além da assimetria da informação entre as OTS e os doadores de recursos (Gordon et al, 2009;Ortmann & Svítková, 2007;Weisbrod & Dominguez, 1986).…”
Section: Introductionunclassified
“…Matches (if they signal quality) could lower the information acquisition cost for donors, and thus shift charitable giving towards more effective charities (e.g., see Krasteva and Yildirim, 2013 ). In a model endogenizing production of quality information, Krasteva and Yildirim (2016) also shows that lowering the cost of information for donors should raise the equilibrium number of quality nonprofits, although at an extreme, with too many donors only seeking the best charities, more quality information could have a deleterious effect on competition in the nonprofit sector.…”
Section: Introductionmentioning
confidence: 99%