Scandinavian Working Papers in Economics
Working Papers in Economics,
University of Gothenburg, Department of Economics
No 522: How Category Reporting Can Improve Fundraising
Edward Cartwright () and Amrish Patel ()
Additional contact information
Edward Cartwright: Dept of Economics, University of Kent, Postal: Canterbury, Kent, UK CT2 7NP
Amrish Patel: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: Box 640, SE 40530 GÖTEBORG, Sweden
Abstract: Many fundraisers report donations using categories such as more than £ 1000, more than £ 10,000 etc. One naturally wonders how we should categorise donations and whether category reporting can raise more funds than simple uncategorised reporting. To shed light on these questions, we employ a signalling game framework in which both the donor’s donation and his bene…ts of being in a higher category are determined endogenously.Our analysis suggests that categorised reporting can always improve fundraising. Indeed, we show that both a high and a low category threshold can increase donations. Categorised reporting, especially with a high threshold, can though also lead to the existence of a low donation equilibrium. Fundraisers may then have to choose between: a safer low threshold and a potentially more lucrative high threshold where they would also have to try to coordinate individuals on the desirable equilibrium.
Keywords: fundraising; category reporting; signalling
35 pages, January 4, 2012
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