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2005, No. 24
Posted 2005-10-02

The Economics of Giving

by Rubén Hernández-Murillo

If a donor’s benefits from giving are public, then a total contribution of $100 gives him the same sense that good is being done, even if his own contribution is $10 or $20. On the other hand, if a donor’s benefits from giving are private, a contribution of $20 generates more satisfaction than a contribution of $10, even if the total contribution is $100 either way.