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Posted offers with charitable promises: True preferences and strategic behavior

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  • Schwirplies, Claudia
  • Lange, Andreas

Abstract

We report experimental findings on the role of charitable promises in settings with posted offers. We vary the enforceability of such promises within variants of ultimatum games where the proposer suggests a split between herself, the responder and a charitable donation. By reneging on initial pledges, dishonest proposers can change the final allocation to their advantage. Providing ex post information on actual donations while leaving the contract incomplete outperforms a complete contract where proposers cannot renege on their charitable promises. The ex post information allows proposers to improve their image by voluntarily giving more than pledged and thus proving that the charitable pledge was not used for strategic reasons. We identify proposer competition as another (surprising) mechanism that partly eliminates cheating among accepted offers, but it also favors offers without charitable pledge.

Suggested Citation

  • Schwirplies, Claudia & Lange, Andreas, 2024. "Posted offers with charitable promises: True preferences and strategic behavior," Games and Economic Behavior, Elsevier, vol. 146(C), pages 308-326.
    • Handle: RePEc:eee:gamebe:v:146:y:2024:i:c:p:308-326
    DOI: 10.1016/j.geb.2024.05.010
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    More about this item

    Keywords

    Bundling; Charity; Public good; Donation pledges; Cheating; Prosocial ultimatum game; Experiment;
    All these keywords.

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship

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