Charity as a Substitute for Reputation: Evidence from an Online Marketplace

54 Pages Posted: 24 May 2010 Last revised: 13 Jul 2011

See all articles by Daniel W. Elfenbein

Daniel W. Elfenbein

Washington University in St. Louis - John M. Olin Business School

Raymond J. Fisman

National Bureau of Economic Research (NBER); Boston University

Brian McManus

University of North Carolina (UNC) at Chapel Hill - Department of Economics

Date Written: March 11, 2010

Abstract

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

Elfenbein, Daniel W. and Fisman, Raymond and McManus, Brian, Charity as a Substitute for Reputation: Evidence from an Online Marketplace (March 11, 2010). Available at SSRN: https://ssrn.com/abstract=1615120 or http://dx.doi.org/10.2139/ssrn.1615120

Daniel W. Elfenbein (Contact Author)

Washington University in St. Louis - John M. Olin Business School ( email )

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Campus Box 1156
St. Louis, MO 63130-4899
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HOME PAGE: http://www.elfenbein.net

Raymond Fisman

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Boston University ( email )

595 Commonwealth Avenue
Boston, MA 02215
United States

Brian McManus

University of North Carolina (UNC) at Chapel Hill - Department of Economics ( email )

Chapel Hill, NC 27599
United States

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