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A signaling explanation for charity

Article Abstract:

The desire to indicate that one is wealthy is analyzed as a possible motive for charitable giving. The theory is based on the assumption that people are willing to donate to charity even if they will not add to the public good. Findings indicate that a person is more willing to donate to an organization because it is very likely that the intended audience will know about the donation. Therefore, market forces cause non-profit organizations to render services even though they are not required to give services with the money they receive.

Nonprofit organizations, Charitable contributions, Charitable donations

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Politics and the choice of durability: reply

Article Abstract:

Hans Gersbach, in a 1993 study, demonstrates that voters show a bias toward durable projects, even under conditions of certainty about future policy. An analysis of this conclusion indicates that the bias has a general source. Individual decision making allows for optimization, but a voter's preferential policy may not be the policy that is adopted under collective decision making. Collective decision making plays a role in government failure, along with special interests and free-rider problems.

Decision-making, Group, Group decision making

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Politics and the choice of durability: comment

Article Abstract:

Amihai Glazer, in a 1989 study, used a two-period model to show that rational agents are biased in favor of durable projects under conditions of collective, rather than individual, decision making. An analysis of Glazer's research indicates that this bias exists only if exogenous uncertainty about future decisions is present. Information that permits the exploitation of minorities by majorities causes voters to be biased in favor of durable projects.

Decision-making, Decision making

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