The Effect of Status on Voluntary Contribution

33 Pages Posted: 8 Apr 2008

See all articles by Cagri S. Kumru

Cagri S. Kumru

Australian National University (ANU)

Lise Vesterlund

University of Pittsburgh - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: April 2008

Abstract

Fundraisers often start their campaigns by soliciting the wealthier, more recognized and respected individuals in a community. We examine whether an explanation for such a solicitation ordering may be that people prefer to associate with those of higher social ranking than themselves. Using a simple linear example we demonstrate that concerns for status may give rise to an optimal solicitation ordering similar to that used by fundraisers. Aggregate contributions and earnings are larger when high-status donors are solicited before rather than after those of low status. To investigate this comparative static experimentally we induce a status differential in the laboratory and reverse the contribution order between high- and low-status participants. We find that low-status followers are likely to mimic contributions by high-status leaders and this encourages high status leaders to contribute. Contributions are therefore larger when individuals of high status contribute before, rather than after, those of low status.

Keywords: Charitable giving, social status, voluntary contribution games

JEL Classification: H00, C91, C72

Suggested Citation

Kumru, Cagri S. and Vesterlund, Lise, The Effect of Status on Voluntary Contribution (April 2008). UNSW Australian School of Business Research Paper No. 2008 ECON 02, Available at SSRN: https://ssrn.com/abstract=1117403 or http://dx.doi.org/10.2139/ssrn.1117403

Cagri S. Kumru (Contact Author)

Australian National University (ANU) ( email )

Canberra, Australian Capital Territory 2601
Australia

Lise Vesterlund

University of Pittsburgh - Department of Economics ( email )

4T18 WW Posvar. Hall
Pittsburgh, PA 15260
United States

HOME PAGE: http://www.econ.iastate.edu/faculty/vesterlund/

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States