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J Socio Econ. 2013 Dec;47. doi: 10.1016/j.socec.2013.08.007.

Do Market Incentives Crowd Out Charitable Giving?.

The Journal of socio-economics

Cary Deck, Erik O Kimbrough

Affiliations

  1. Department of Economics, Simon Fraser University, 8888 University Drive, Burnaby, BC V5A1S6, Canada.

PMID: 24348002 PMCID: PMC3857091 DOI: 10.1016/j.socec.2013.08.007

Abstract

Donations and volunteerism can be conceived as market transactions with a zero explicit price. However, evidence suggests people may not view zero as just another price when it comes to pro-social behavior. Thus, while markets might be expected to increase the supply of assets available to those in need, some worry such financial incentives will crowd out altruistic giving. This paper reports laboratory experiments directly investigating the degree to which market incentives crowd out large, discrete charitable donations in a setting related to deceased organ donation. The results suggest markets increase the supply of assets available to those in need. However, as some critics fear, market incentives disproportionately influence the relatively poor.

Keywords: Crowding Out; Market Incentives; Organ Donation; Pro-Social Behavior

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