Nudging Generosity: Choice Architecture and Cognitive Factors in Charitable Giving
17 Pages Posted: 14 Oct 2016 Last revised: 17 Oct 2016
Date Written: September 13, 2016
In an experimental setup we investigate the effect of providing a list of default charities on donation decisions. In the treatment group, subjects can either specify a charity of their choice, or select one from a list of five well-known charities; in the control group we do not provide the list. In a sample of 869 subjects we find a large effect: Offering a list of default charities doubles the fraction of donors, as well as the revenue for charities, i.e., we observe a strong treatment effect on the extensive margin, but no effect at the intensive margin. We find that the treatment intervention particularly affects subjects who tend to make intuitive choices. Our results point to the importance of psychological factors like intuition in determining donation decisions, and suggest that the decision whether to donate and the decision on the donation amount are governed by two separate cognitive processes.
Keywords: charitable giving, donation, choice architecture, defaults, affective reactions
JEL Classification: C93, D64, H41, L3
Suggested Citation: Suggested Citation