QED Working Paper Number

Experiments involving multiple public goods with contribution thresholds capture many features of charitable giving environments in which donors try to coordinate their contributions across various potential recipients. We present results from a laboratory experiment that introduces endowment and preference differences into such a framework to explore the impact of donor heterogeneity on public good success and payoffs. We observe that donors tend to focus on the recipients preferred by the wealthiest contributors, ignoring other recipients, as they try to coordinate their donations to ensure public good success. We refer to this collective focus on the preferred good of the wealthiest as the Gates Effect, showing that the public goods preferred by the wealthiest are more salient even in the absence of seed money, matching grants, misperception of payoffs. The Gates Effect can reduce inequality among donors groups that succeed in funding a public good; however, it also affects the philanthropic agenda, reducing the variety of public goods that receive funding. 

Luca Corazzini
Enrico Longo
Tommaso Reggiani
JEL Codes
lab experiment
public goods
donor heterogeneity
donor strategy
campaign contributions
Working Paper