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Delegation and coordination with multiple threshold public goods: experimental evidence

Published online by Cambridge University Press:  14 March 2025

Luca CorazziniOpen the ORCID record for Luca Corazzini[Opens in a new window],
Christopher CottonOpen the ORCID record for Christopher Cotton[Opens in a new window] and
Tommaso ReggianiOpen the ORCID record for Tommaso Reggiani[Opens in a new window]
Luca Corazzini
Affiliation:
Department of Economics, University of Venice “Ca’ Foscari”, Venice, Italy
Christopher Cotton
Affiliation:
Department of Economics, Queen’s University, Kingston, Canada
Tommaso Reggiani*
Affiliation:
Department of Public Economics, Masaryk University, Brno, Czech RepublicIZA, Bonn, Germany
*
tommaso.reggiani@econ.muni.cz
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Abstract

When multiple charities, social programs and community projects simultaneously vie for funding, donors risk mis-coordinating their contributions leading to an inefficient distribution of funding across projects. Community chests and other intermediary organizations facilitate coordination among donors and reduce such risks. To study this, we extend a threshold public goods framework to allow donors to contribute through an intermediary rather than directly to the public goods. Through a series of experiments, we show that the presence of an intermediary increases public good success and subjects’ earnings only when the intermediary is formally committed to direct donations to socially beneficial goods. Without such a restriction, the presence of an intermediary has a negative impact, complicating the donation environment, decreasing contributions and public good success.

Keywords

DelegationThreshold public goodsLaboratory experimentFundraising

JEL classification

H41: Public GoodsH40: GeneralC91: Laboratory, Individual BehaviorL31: Nonprofit Institutions • NGOs • Social EntrepreneurshipC92: Laboratory, Group Behavior

Information

Type
Original Paper
Information
Experimental Economics , Volume 23 , Issue 4 , December 2020, pp. 1030 - 1068
Copyright
Copyright © 2019 Economic Science Association

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Footnotes

Electronic supplementary material The online version of this article (https://doi.org/10.1007/s10683-019-09639-6) contains supplementary material, which is available to authorized users.

We thank Diya Elizabeth Abraham, Federica Alberti, Eliane Barker, Pietro Dindo, Milos Fisar, Ben Greiner, Wolfgang Luhan, Valeria Maggian, Thomas Markussen, Louis Putterman, Rainer Michael Rilke, Christian Thöni, Serena Trucchi, Kei Tsutsui, Ansgar Wohlschlegel, participants at the Workshop on Endogenous Institutions in Social Dilemmas in Copenhagen, the ESA World Meeting in Berlin, and seminars in Venice and Portsmouth, for useful discussions and comments. We are especially grateful to Joachim Vosgerau for giving us the opportunity to run the experiment at the Bocconi Experimental Laboratory for the Social Sciences (BELSS, Bocconi University, Milan). Iuliana Iuras provided excellent research assistance during our experimental sessions at BELSS. Cotton is grateful for financial support provided through his position as the Jarislowsky–Deutsch Chair in Economic and Financial Policy at Queen’s University and the Social Sciences and Humanities Research Council of Canada (435-2017-0573). Reggiani is grateful for financial support from the Czech Science Foundation (GACR: GA18-19492S). All errors are ours.

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