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Endogenous production technology in a public goods enterprise

Charity with Choice

ISBN: 978-1-84950-768-4, eISBN: 978-1-84950-769-1

Publication date: 17 March 2010

Abstract

Purpose – Motivated by new models of nonprofit organizations, we study a voluntary contributions environment in which the productivity of the public goods process is chosen endogenously by a manager. The experimental treatments incorporate two institutions of transparency in the organization, which we conjecture will assist the manager in achieving an outcome superior to the standard free-riding prediction.

Methodology – The chapter uses the methodology of laboratory experimental economics.

Findings – The findings demonstrate that transparency institutions can be important for assisting the manager and the stakeholders achieve relative stable and efficient outcomes.

Limitations – We discuss obvious areas for further investigation including environments in which firm productivity is only stochastically related to the decisions of the manager.

Practical and Social Implications – The chapter is oriented to real-world issues in the organization of nonprofit enterprises, which were a once ubiquitous and now re-emerging source of charitable activity. The chapter is written so that it should be accessible to informed practitioners in nonprofit organizations.

Originality – The study of endogenous environments and institutions in the provision of charitable and public goods is a relatively new advance and is indeed the theme of Research in Experimental Economics, Volume 13, “Charity with Choice.”

Citation

Norton, D.A. and Isaac, R.M. (2010), "Endogenous production technology in a public goods enterprise", Isaac, R.M. and Norton, D.A. (Ed.) Charity with Choice (Research in Experimental Economics, Vol. 13), Emerald Group Publishing Limited, Leeds, pp. 131-163. https://doi.org/10.1108/S0193-2306(2010)0000013008

Publisher

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Emerald Group Publishing Limited

Copyright © 2010, Emerald Group Publishing Limited