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Altruism and Donations

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  • Sao-Wen Cheng
  • Andreas Wagener

Abstract

We examine two types of altruism and their implications for voluntary giving. Philanthropists are altruists who wish to enhance the well-being of others, while individuals with merit-good preferences only wish to further the consumption of certain merit goods by others. Philanthropic donors prefer to make cash donations, while donors with merit-good preferences prefer to give in kind. The equilibrium of a donations-game with a philanthropic donor and recipients is efficient, while the equilibrium of a game with a single donor with merit-good preferences is not. Both equilibria are inefficient if there are multiple donors with strategic interaction amongst them.

Suggested Citation

  • Sao-Wen Cheng & Andreas Wagener, 2000. "Altruism and Donations," Volkswirtschaftliche Diskussionsbeiträge 92-00, Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht.
    • Handle: RePEc:sie:siegen:92-00
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    File URL: http://www.wiwi.uni-siegen.de/vwl/repec/sie/papers/92-00.pdf
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    More about this item

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers

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