Abstract
We report experimental findings on the role of charitable promises in settings with posted offers. We vary the enforceability of such promises within variants of ultimatum games where the proposer suggests a split between herself, the responder and a charitable donation. By reneging on initial pledges, dishonest proposers can change the final allocation to their advantage. Providing ex post information on actual donations while leaving the contract incomplete outperforms a complete contract where proposers cannot renege on their charitable promises. The ex post information allows proposers to improve their image by voluntarily giving more than pledged and thus proving that the charitable pledge was not used for strategic reasons. We identify proposer competition as another (surprising) mechanism that partly eliminates cheating among accepted offers, but it also favors offers without charitable pledge.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
