A Note on the Theory of Charitable Fundraising: The Role of Refunds

Posted: 12 Apr 2001

See all articles by Paul Pecorino

Paul Pecorino

University of Alabama - Department of Economics, Finance and Legal Studies

Akram Temimi

University of Alabama, Tuscaloosa

Abstract

Andreoni (1998) shows that a small amount of seed money from the government can generate substantial additional private donations towards the provision of a public good, when there is a threshold level of provision below which no benefits are achieved. We argue that Andreoni's solution can be extended to a mechanism where refunds are possible. We then argue that a greater bang per buck may be achieved if the seed money is targeted to cover the administrative costs of providing refunds.

Keywords: Public Goods, Seed Money, Threshold Level of Provision

JEL Classification: H41

Suggested Citation

Pecorino, Paul and Temimi, Akram, A Note on the Theory of Charitable Fundraising: The Role of Refunds. Available at SSRN: https://ssrn.com/abstract=263506

Paul Pecorino (Contact Author)

University of Alabama - Department of Economics, Finance and Legal Studies ( email )

P.O. Box 870244
Tuscaloosa, AL 35487
United States
205-348-0379 (Phone)
205-348-0590 (Fax)

Akram Temimi

University of Alabama, Tuscaloosa ( email )

Department of Economics, Finance and Legal Studies
P.O. Box 870244
Tuscaloosa, AL 35487
United States
205-348-8961 (Phone)

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