Time-Inconsistent Charitable Giving
NBER Working Paper No. 22824
We motivate this paper by presenting a puzzle. When we asked one group of subjects to give $5 to charity today, about 30% agree. When we asked a similar group the same question, but indicate their gift will be transacted in one week rather than today, giving increases by 50%. This suggests a classic time-inconsistency in charitable giving. It is a puzzle because classic discounting and models of temptation cannot capture major patterns in the data, though clearly the difference must have something to do with delay, but what? We conduct two new experiments to resolve the puzzle. Our explanation relies on the rich dynamics of social image signaling of pro-social behavior.
Document Object Identifier (DOI): 10.3386/w22824
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