Charity as a Substitute for Reputation: Evidence from an Online Marketplace
54 Pages Posted: 24 May 2010 Last revised: 13 Jul 2011
Date Written: March 11, 2010
Consumers respond positively to products tied to charity, particularly from sellers that are relatively new and hence have limited alternative means for assuring quality. We establish this result using data from a diverse group of eBay sellers who individually “experiment” with charity by varying the presence of a donation in a set of otherwise matched product listings. Most of charity’s benefits accrue to sellers without extensive eBay histories. Consistent with charity serving as a quality signal, we find fewer customer complaints among charity-intensive sellers.
Keywords: corporate philanthropy, social responsibility, reputation, altruism
JEL Classification: D44, H41, L81, M14, M31
Suggested Citation: Suggested Citation