The Crowding-Out Effect of Seller’s Contribution on Private Donations: Application to Cause-Marketing

Last registered on October 29, 2019

Pre-Trial

Trial Information

General Information

Title
The Crowding-Out Effect of Seller’s Contribution on Private Donations: Application to Cause-Marketing
RCT ID
AEARCTR-0004463
Initial registration date
October 29, 2019

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
October 29, 2019, 2:44 PM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Primary Investigator

Affiliation
Texas A&M University

Other Primary Investigator(s)

PI Affiliation
Texas A&M University

Additional Trial Information

Status
In development
Start date
2019-10-31
End date
2020-04-30
Secondary IDs
Abstract
Cause marketing (CM) refers to the practice of linking consumer goods with charities or “causes”. It is a very common practice for increasing sales and loyalty of products. There is an extensive literature on the extent to which charitable donations are motivated by pure altruism and warm glow. In this study, we will explore altruistic preferences of individuals when they purchase goods that are associated with charitable giving. We introduce a theoretical model and an experimental design to study the giving motivations of individual in a charitable giving framework that accommodates cause marketing. CM is also used as a tool to increase total amount of donations to a certain charity or for a particular cause. We will use our model and experiment to show that an increase in total donations will occur only for certain preference types. In particular, individuals who do not view direct donations and donations from cause-marketing as perfect substitutes and get more utility from direct givings are behind a surge in total charitable output.
External Link(s)

Registration Citation

Citation
Palma, Marco and Nishita Sinha. 2019. "The Crowding-Out Effect of Seller’s Contribution on Private Donations: Application to Cause-Marketing." AEA RCT Registry. October 29. https://doi.org/10.1257/rct.4463
Sponsors & Partners

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Experimental Details

Interventions

Intervention(s)
200 subjects will make several decisions where they will allocate their endowment between buying tokens for themselves and a receiver. Every subject will be paired with a different receiver. The endowment and certain other variables will vary across the decisions.
Intervention Start Date
2019-10-31
Intervention End Date
2020-04-30

Primary Outcomes

Primary Outcomes (end points)
Direct private giving of the participants
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
In our within subject design, participants will use their endowment to purchase tokens for themselves and donate to a charity. Some treatments will have exogenous donations from a third party while others will involve third party donations as a function of participants' token purchase (endogenous). The decision tasks differ from each other based on endowment, token price, and the level of exogenous and endogenous donations.
Experimental Design Details
In our within subject design, all subjects make seven allocation decisions. They allocate their endowment between buying tokens for themselves and donating to an organic cocoa grower from Ecuador. Each subject is paired with a different cocoa grower. In addition to the subject, the grower can receive donations from a third party foundation. These donations come in one of the two forms - (i) there is an exogenous donation to the grower (ii) the amount of donation from the foundation depends on number of tokens purchased by the participant.

In order to test for pure altruism, we keep the budget constraint unchanged. The price of tokens increase by "x" if the third party foundation donates "x" dollars for every unit of tokens purchased by the participant. This allows us to test for the crowding out hypothesis associated with pure altruism. The treatments vary with respect to the amount of exogenous and endogenous third party donations.
Randomization Method
Computerized randomization
Randomization Unit
Individual
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
200 individuals
Sample size: planned number of observations
1600-2000 In our within subject design, each individual will make 8-10 decisions
Sample size (or number of clusters) by treatment arms
It is a within subject design. All 200 subjects participate in all treatments.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB

Institutional Review Boards (IRBs)

IRB Name
Research Compliance and Biosafety, Texas A&M University
IRB Approval Date
2019-10-03
IRB Approval Number
IRB2019-0201M

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials