Can Charitable Appeals Identify and Exploit Belief Heterogeneity?
41 Pages Posted: 28 Jan 2021
Date Written: 2021
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: Suggested Citation