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Brothers in Alms? Coordination between NGOs on Markets for Development Donations

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  • Verdier, Thierry
  • Marini, Marco
  • Aldashev, Gani

Abstract

This paper studies the stability of coordination between mission-driven non-governmental organizations (NGOs) competing for donations. We build a non-cooperative game-theoretic model of alliance formation between NGOs that compete through fundraising activities and impose externalities on each others? output. We derive general results on the stability of full coordination under two classes of alliance-formation rules: unanimity and aggregative. If fundraising activities are strategic complements, the grandcoalition (i.e. full coordination) is always individually stable and, under the unanimity rule, coalitionally stable. When fundraising activities are strategic substitutes, the grandcoalition can be unstable and the instability is more likely, the steeper are NGOs? (negatively sloped) best-reply functions. Under the aggregative rule, the grandcoalition is stable: (i) individually, if there are negative coalitional externalities; (ii) coalitionally, if breaking an alliance requires the majority of NGOs involved in the alliance.

Suggested Citation

  • Verdier, Thierry & Marini, Marco & Aldashev, Gani, 2010. "Brothers in Alms? Coordination between NGOs on Markets for Development Donations," CEPR Discussion Papers 8109, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:8109
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    More about this item

    Keywords

    Ngos; Giving; Coordination; Endogenous coalition formation; Non-distribution constraint;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship
    • L44 - Industrial Organization - - Antitrust Issues and Policies - - - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations

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