Showing papers by "Steffen Huck published in 2019"

Everyday econometricians: Selection neglect and overoptimism when learning from others

Abstract: In this paper, we design an investment game which allows us to study the influence of selection when learning from others. Using the theoretical study of selection neglect in Jehiel (2018) as a guide, we test (i) for the presence of selection neglect in this investment context, and (ii) some comparative static predictions of the model. We find strong evidence for selection neglect—even though subjects are fully informed about the data generating process. As theoretically predicted, the degree of bias due to selection neglect increases when other decision makers become more informed, or become more rational. It decreases when signals are correlated.

Charitable giving by the poor: A field experiment on matching and distance to charitable output in Kyrgyzstan

Abstract: Previous studies of charitable giving have focused on middle or higher income earners in Western countries, neglecting the poor. Despite this focus, the lowest income groups are often shown to contribute substantial shares of their income to charitable causes. In a large-scale natural field experiment with over 180,000 cli-ents of a micro-lending company in Kyrgyzstan, we study charitable giving by a population that is much poorer relative to the typical donors that have been stud-ied so far. In a 2x2 design, we explore two main hypotheses about giving by the poor: (i) that they are more price sensitive and (ii) that they care about their prox-imity to the charitable project. We find evidence in favor of the former hypothesis but not of the latter.

Personalized Fundraising: A Field Experiment on Threshold Matching of Donations

Abstract: While increasing the number of small donors, standard linear matching schemes have been shown to cause considerable crowding out in charitable giving with pronounced effects on large gifts. We propose a form of threshold matching where donations above a certain, potentially personalized, threshold are topped up with a fixed amount. We show theoretically that threshold matching can induce crowding in if appropriately personalized. In a field experiment, we explore how thresholds should be chosen depending on past donations. We find that the optimal choice of thresholds is rather bold, approximately 60-75% above past donations. Additionally, we explore how thresholds should be set for new donors as a function of their personal characteristics and demonstrate the benefits of personalization as opposed to setting general thresholds applying to all recipients of a fundraising call.

Can Mass Fundraising Harm Your Core Business? A Field Experiment on How Fundraising Affects Ticket Sales

Abstract: Some companies engage in mass fundraising — where thousands of recipients are asked to make small donations — in addition to their core business. Via a corporate social responsibility (CSR) channel this may increase sales. However, recent research uncovered significant “ask avoidance” which, if present, could imply that fundraising activities may harm a company’s core business. Here we examine how asking for donations affects ticket sales of a publically owned leading opera company. In two large-scale randomized controlled trials with a total of over 50,000 opera visitors, who are asked to donate for a social youth project, we find that donations can crowd out ticket expenditure during a campaign. But for the longer run we observe a precisely estimated null effect.