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Learning by fund-raising

Author

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  • Alvaro J. Name-Correa

    (Universidad Carlos III de Madrid)

Abstract

From experience, fund-raisers become more efficient solicitors. This paper offers a full characterization of the optimal solicitation strategy when there are learning economies. The characterization is recursive, and does not require equilibrium computations. Our main results are that (1) the fund-raiser may now solicit a “ net free-rider”—a donor whose contribution falls below the marginal solicitation cost; (2) the number of solicitations is non-monotonic in the learning rate; and (3) a solicitation technology with high overhead but low marginal costs is likely to be optimal if income distribution in the population is relatively homogenous. The complementary case with a decreasing returns to scale technology is also considered.

Suggested Citation

  • Alvaro J. Name-Correa, 2017. "Learning by fund-raising," Review of Economic Design, Springer;Society for Economic Design, vol. 21(4), pages 291-316, December.
    • Handle: RePEc:spr:reecde:v:21:y:2017:i:4:d:10.1007_s10058-017-0207-7
    DOI: 10.1007/s10058-017-0207-7
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    References listed on IDEAS

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    More about this item

    Keywords

    Fund-raising; Solicitation cost; Charitable giving;
    All these keywords.

    JEL classification:

    • H00 - Public Economics - - General - - - General
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General

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