Working Paper: NBER ID: w15614
Authors: Daniel Elfenbein; Raymond Fisman; Brian McManus
Abstract: We investigate the impact of charity tie-ins on transaction probabilities and sale prices using a large database of eBay auctions. We examine "natural experiments" of precisely matched clusters of charity and non-charity auctions with identical titles, subtitles, sellers, and start prices. We find a 6 to 14 percentage point increase in sale probability and a 2 to 6 percent greater maximum bid for charity items, depending on the fraction of auction proceeds that is donated to charity. The impact on sale probability and price is most pronounced among sellers without extensive eBay histories, suggesting that consumers view charity as a signal of seller quality and a substitute for reputation. We also find that charity-tied products by all sellers are more likely to sell (and at higher prices) immediately following Hurricane Katrina, implying that consumers derive direct utility from seller charity at times when charity is particularly salient.
Keywords: charity; eBay; seller reputation; consumer behavior; altruism
JEL Codes: D44; H41; L81; M14; M31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| charity tie-ins (D64) | sale probability (D44) |
| charity tie-ins (D64) | maximum bid (D44) |
| charity tie-ins (D64) | selling probabilities and prices (G13) |
| charity tie-ins (D64) | consumer utility (D11) |
| higher-feedback sellers (D26) | benefits from charity tie-ins (D64) |