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Rational inattention to subsidies for charitable contributions
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Scharf, Kimberly A. and Smith, Sarah (2010) Rational inattention to subsidies for charitable contributions. Working Paper. Coventry: Department of Economics, University of Warwick. CAGE Online Working Paper Series, Volume 2010 (Number 2).
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Text (Working paper)
WRAP_Scharf_02.2010_scharf_rational.pdf - Published Version Download (790Kb) | Preview |
Official URL: http://www2.warwick.ac.uk/fac/soc/economics/staff/...
Abstract
Evidence suggests that individuals fail to process all relevant attributes when making decisions. Recent literature has mainly focused on shrouded attributes. Here we present a simple model where agents rationally choose not to process attributes even when they are not shrouded, and we investigate its predictions for the case of subsidies for charitable donations. These are offered as rebates or matches. Both lower the price of giving, but, crucially, with different implications for rational non-processing choices. Survey and experimental evidence on donation responses to equivalent changes in the match and the rebate is consistent with our model of rational inattention.
Item Type: | Working or Discussion Paper (Working Paper) | ||||
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Subjects: | H Social Sciences > HB Economic Theory | ||||
Divisions: | Faculty of Social Sciences > Economics | ||||
Library of Congress Subject Headings (LCSH): | Charities -- Economic aspects , Endowments -- Economic aspects , Taxation, Tax rebates, Tax incentives | ||||
Series Name: | CAGE Online Working Paper Series | ||||
Publisher: | Department of Economics, University of Warwick | ||||
Place of Publication: | Coventry | ||||
Official Date: | March 2010 | ||||
Dates: |
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Volume: | Volume 2010 | ||||
Number: | Number 2 | ||||
Number of Pages: | 31 | ||||
Status: | Not Peer Reviewed | ||||
Publication Status: | Published | ||||
Access rights to Published version: | Open Access (Creative Commons) | ||||
Date of first compliant deposit: | 1 August 2016 | ||||
Date of first compliant Open Access: | 1 August 2016 | ||||
Version or Related Resource: | Scharf, Kimberley A. and Smith, Sarah (2010). Rational inattention to subsidies for charitable contributions. Coventry : Centre for Economic Policy Research. (CEPR Discussion Paper no. 7760). Scharf, Kimberley A. and Smith, Sarah (2010). Rational inattention to subsidies for charitable contributions. Coventry : Centre for Competitive Advantage in the Global Economy. (CAGE Working Paper series no. 02/2010). |
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