IDEAS home Printed from https://ideas.repec.org/p/fip/fedbwp/09-21.html
   My bibliography  Save this paper

Seeds to succeed: sequential giving to public projects

Author

Listed:
  • Anat Bracha
  • Michael Menietti
  • Lise Vesterlund

Abstract

The public phase of a capital campaign is typically launched with the announcement of a large seed donation. Andreoni (1998) argues that such a fundraising strategy may be particularly effective when funds are being raised for projects that have fixed production costs. The reason is that the introduction of fixed costs may give rise to both positive and zero provision outcomes, and absent announcements of a large seed gift, donors may get stuck in an equilibrium that fails to provide a desirable public project. Interestingly, Andreoni (1998) demonstrates that announcing seed money can help eliminate such inferior outcomes. We investigate this model experimentally to determine whether announcements of seed money eliminate the inefficiencies that may result under fixed costs and simultaneous provision. To assess the strength of the theory we examine the effect of announcements in both the presence and absence of fixed costs. Our findings are supportive of the theory for projects with sufficiently high fixed costs.

Suggested Citation

  • Anat Bracha & Michael Menietti & Lise Vesterlund, 2009. "Seeds to succeed: sequential giving to public projects," Working Papers 09-21, Federal Reserve Bank of Boston.
    • Handle: RePEc:fip:fedbwp:09-21
    as

    Download full text from publisher

    File URL: http://www.bostonfed.org/economic/wp/wp2009/wp0921.htm
    Download Restriction: no
    File URL: http://www.bostonfed.org/economic/wp/wp2009/wp0921.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    More about this item

    Keywords

    Fund raisers;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedbwp:09-21. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Spozio (email available below). General contact details of provider: https://edirc.repec.org/data/frbbous.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.