Premium
A Note on the Theory of Charitable Fund‐raising: The Role of Refunds
Author(s) -
Pecorino Paul,
Temimi Akram
Publication year - 2001
Publication title -
journal of public economic theory
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.809
H-Index - 32
eISSN - 1467-9779
pISSN - 1097-3923
DOI - 10.1111/1097-3923.00071
Subject(s) - government (linguistics) , economics , politics , cover (algebra) , mechanism (biology) , raising (metalworking) , fund raising , microeconomics , monetary economics , public economics , economic growth , law , political science , mechanical engineering , philosophy , linguistics , geometry , mathematics , epistemology , higher education , engineering
Andreoni (1998, Journal of Political Economy 106 , 1186–1213) shows that a small amount of seed money from the government can generate substantial additional private donations toward the provision of a public good, when there is a threshold level of provision below which no benefits are achieved. We argue that Andreoni's solution can be extended to a mechanism where refunds are possible. We then argue that a greater “bang per buck” may be achieved if the seed money is targeted to cover the administrative costs of providing refunds.