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32 - Model Giving game with giver and fund-raiser Timing...

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Model Giving game with giver and fund-raiser. Timing: Stage 1 : No Flyer: Giver at home with probability h = h 0 Flyer: · Giver sees fl yer with probability r · Can alter probability of being at home h from baseline h 0 at cost c ( h ) , with c ( h 0 ) = 0 , c 0 ( h 0 ) = 0 , and c 00 ( · ) > 0 Stage 2 : Fund-raiser visits home of giver: · If giver at home (w/ prob. h ), in-person donation g 0 · If saw fl yer (w/ prob. r ), donation via mail g m 0
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Utility function of giver: U ( g ) = u ( W g g m ) + av ( g + θg m , G i ) s ( g ) Agent cares about: Private consumption u ( W g g m ) , with u 0 ( · ) > 0 and u 00 ( · ) 0 Giving to charity av ( · , G i ) , with v 0 g ( · , · ) > 0 , v 00 g,g ( · , · ) < 0 , lim g →∞ v 0 g ( g, · ) = 0 , and v (0 , G i ) = 0 . Two special cases for v ( g, G i ) : Pure altruism (Charness and Rabin 2002, Fehr and Gächter, 2000): v ( g, G i ) = v ( g + θg m + G i ) , a is altruism parameter Warm glow (Andreoni, 1989 and 1990): v ( g, G i ) = v ( g ) , a is weight on warm glow Giving via mail is less attractive ( θ < 1 ): less warm glow, cost of giving,...
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Social Pressure s ( g ) = S ( g s g ) · 1 g<g s 0 Social pressure s = 0 if not at home or if giving g g s (socially acceptable amount) Social pressure s > 0 for giving g < g s , decreasing in g Captures identity (Akerlof and Kranton, 2000), social norms, or self-signalling (Bodner and Prelec, 2002; Grossman, 2007) Psychology evidence: Tendency to conformity and obedience (Milgram, 1952 and Asch, 1957) E ff ect stronger for face-to-face interaction
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Figure. Social Pressure Cost At Estimated Parameters
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