Adding Exchange to Charity: A Reference Price Explanation

26 Pages Posted: 10 Oct 2005

See all articles by Barbara Briers

Barbara Briers

Tilburg University - Tilburg University School of Economics and Management

Mario Pandelaere

Catholic University of Leuven (KUL) - School for Mass Communication Research

Luk Warlop

KU Leuven - Faculty of Business and Economics (FEB); BI Norwegian Business School

Date Written: 2005

Abstract

Charities often request donations while offering of a near-worthless token, like a key chain, in exchange. Little research has examined whether such 'exchange' requests are met with higher compliance rates than merely asking people to donate. Our studies suggest that in mere donation settings people may have difficulties to estimate a socially acceptable donation amount and therefore prefer opportunities that provide them with an anchor price. The value of a material good in a donation setting can play this anchoring role and signal a reference price. To the extent that the suggested reference price is low enough, exchange requests lead to more compliance than mere donation requests. In addition, our results indicate that, when accompanied by specified amounts, mere donation requests result in even better compliance rates than exchange requests.

Keywords: Fundraising, donation behavior, exchange, reference price, anchor

Suggested Citation

Briers, Barbara and Pandelaere, Mario and Warlop, Luk, Adding Exchange to Charity: A Reference Price Explanation (2005). Available at SSRN: https://ssrn.com/abstract=813584 or http://dx.doi.org/10.2139/ssrn.813584

Barbara Briers (Contact Author)

Tilburg University - Tilburg University School of Economics and Management ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Mario Pandelaere

Catholic University of Leuven (KUL) - School for Mass Communication Research ( email )

Leuven, B-3000
Belgium

Luk Warlop

KU Leuven - Faculty of Business and Economics (FEB) ( email )

Naamsestraat 69
Leuven, B-3000
Belgium

BI Norwegian Business School ( email )

Nydalsveien 37
Oslo, 0442
Norway

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