Can Charitable Appeals Identify and Exploit Belief Heterogeneity?

41 Pages Posted: 28 Jan 2021

See all articles by Michalis Drouvelis

Michalis Drouvelis

University of Birmingham - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Benjamin Marx

University of Illinois at Urbana-Champaign

Date Written: 2021

Abstract

Charitable fundraisers frequently announce giving by others, and research shows that this can increase donations. However, this mechanism may not put information about peers to the most efficient use if it is costly to inform individuals who are indifferent to peer actions or causes some individuals to give less. We investigate whether a simple mechanism without incentives can predict heterogeneity in charitable responses to peer decisions. We elicit beliefs about donations in a baseline solicitation, and in subsequent solicitations we randomly assign information about others’ donations. We find that elicited beliefs are often logically inconsistent and that many subjects fail to update beliefs when treated. However, elicited beliefs can predict heterogeneous treatment effects if individuals are engaged and the information is salient.

JEL Classification: D010, D640, A130

Suggested Citation

Drouvelis, Michalis and Marx, Benjamin, Can Charitable Appeals Identify and Exploit Belief Heterogeneity? (2021). Available at SSRN: https://ssrn.com/abstract=3774662 or http://dx.doi.org/10.2139/ssrn.3774662

Michalis Drouvelis (Contact Author)

University of Birmingham - Department of Economics ( email )

Economics Department
Birmingham, B15 2TT
United Kingdom

HOME PAGE: http://sites.google.com/site/michalisdrouvelis/

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Poschinger Str. 5
Munich, 01069
Germany

Benjamin Marx

University of Illinois at Urbana-Champaign ( email )

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