The role of incentive structure in eliciting willingness to donate

Abstract

The monetary incentives provided to participants lie at the heart of controversies in experimental economics. In the literature, opinions differ about the required structure and importance of incentives. This study compares five incentive schemes for charity donation decisions in South Africa. We document similar findings to those in the literature when looking at mean decisions. Participants tend to donate more where endowments are hypothetical and have a lower payout probability. On the other hand, donations are lower where endowments are earned. We generate the earned endowment effect simply by framing part of the survey questionnaire as a “paid task”, suggesting an innovative way of framing earnings in experiments without the onerous requirement of earning tasks. Finally, we note material gender differences by incentive scheme, which might have an important implication for our knowledge of gender differences in charitable giving.