Document Type
Article
Publication Date
7-2012
Publication Title
Journal of Public Economic Theory
Publication Title (Abbreviation)
J. Pub. Econ. Theory
Volume
14
First Page
625
Last Page
652
Abstract
This paper develops a simple spatial model of fundraising, in which charities select a target population to solicit donations. First, we show that in a competitive charity market without any intervention, the number of charities in the market and/or the overall net funds raised by charities may be sub-optimal. Next, we analyze whether a social planner can prevent such shortcomings and show that a regulatory mechanism can be designed to achieve socially desirable outcomes. In contrast to the previous literature, our model does not necessarily produce monopoly as the optimal market structure. We show that if fixed costs associated with establishing charities are sufficiently low, then the optimal market structure is not a monopoly. Given the importance of the trade-o¤ between the volume and variety of charitable services, we argue that this result may be of particular interest to policy makers.
DOI
10.1111/j.1467-9779.2012.01555.x
Rights
Authors' accepted manuscript, © 2011 Murat C. Mungan and Bariş K. Yörük
Faculty Biography
http://law.fsu.edu/our-faculty/profiles/mungan
Recommended Citation
Murat C. Mungan and Bariş K. Yörük,
Fundraising and Optimal Policy Rules, 14
J. Pub. Econ. Theory
625
(2012),
Available at: https://ir.law.fsu.edu/articles/119
Comments
This is the author's accepted manuscript version. The version of record (© 2014 Elsevier) is available at http://onlinelibrary.wiley.com/enhanced/doi/10.1111/j.1467-9779.2012.01555.x/ or the DOI provided above.