Consistent or Balanced? On the Dynamics of Voluntary Contributions

32 Pages Posted: 2 Sep 2014

See all articles by Carlo Gallier

Carlo Gallier

ZEW – Leibniz Centre for European Economic Research

Christiane Reif

ZEW – Leibniz Centre for European Economic Research - Environmental and Resource Economics, Environmental Management Research

Daniel Römer

ZEW – Leibniz Centre for European Economic Research

Date Written: September 1, 2014

Abstract

We investigate the dynamic effects of a charitable lottery and an income tax on donations. The analysis is based on a two-round dictator game with the subject’s charity of choice as recipient and additional incentives in the first round only. The immediate effect of a charitable lottery leads to higher contributions and we cannot find substantial crowding out of voluntary contributions in the presence of an income tax. These economic interventions weakly spill-over to the subsequent donation decisions without additional incentives. Our results suggest the presence of consistency seeking behaviour. This is especially true for a subgroup of participants with a rule-based mind-set and our research shows the importance of the subjects’ moral framework in the context of dynamic pro-social behaviour.

Keywords: charitable giving, laboratory experiment, lottery, tax, voluntary contribution mechanism

JEL Classification: C91, D64

Suggested Citation

Gallier, Carlo and Reif, Christiane and Römer, Daniel, Consistent or Balanced? On the Dynamics of Voluntary Contributions (September 1, 2014). ZEW - Centre for European Economic Research Discussion Paper No. 14-060, Available at SSRN: https://ssrn.com/abstract=2489897 or http://dx.doi.org/10.2139/ssrn.2489897

Carlo Gallier (Contact Author)

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

Christiane Reif

ZEW – Leibniz Centre for European Economic Research - Environmental and Resource Economics, Environmental Management Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim
Germany

Daniel Römer

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

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