Charitable Giving and Breakable Donation Chains: An Experimental Investigation
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2015
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Haverford College. Department of Economics
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Thesis
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Award
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eng
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Open Access
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Abstract
Significant empirical and experimental research has been conducted on the motivations behind charitable giving. Recently charities have unlocked a new key trend in encouraging donations: the “breakable” donation chain. Breakable chains occur when a chain of participants can be effectively “broken” (or discontinued) by a single person’s decision not to participate. While breakable donation chains exist in forms such as “pay-it-forward” chains and kidney donation chains, a recent example is the ALS Ice Bucket Challenge over the summer of 2014. In this instance, the donation chain was both breakable and public. This paper extends the existing literature by testing how breakability affects charitable contributions, in addition to testing the effects of previously studied motivations such as intrinsic and image motivation. The results show that the highest mean donations occur in settings where players donate simultaneously, but that players are more likely to donate any amount under a breakable chain condition. The results imply that people are more inclined to participate if the decision to donate benefits a cause by more than just a person’s single donation, as there may be future donations from subsequent individuals.