Signaling and search in humanitarian giving: models of donor and organization behavior in the humanitarian space

At its core, this dissertation examines the role of information, particularly as it relates to proxies for quality, and how it affects both donor and organization decision processes in the humanitarian space. In Chapter 2 I consider the context of competition within the sub-sector of international humanitarian relief organizations. It has been observed that large scale humanitarian relief events tend to spawn highly competitive environments in which organizations compete with one another for publicity and funding, often times to the detriment of effective resource utilization. The question of why altruistic organizations behave in this manner arises. Positing that competition is a result of dual organization objectives and the inability to credibly signal quality a model of signaling is presented to explain this phenomenon, and conditions under which pooling and separating equilibrium can occur are shown. Results are shown to match closely with observed behavior, and potential policy remedies are considered using the model as a foundation.Chapter 3 addresses a similar question but broadens the analysis to that of a general market for charitable goods. Building on foundational results in search theory, I propose a two-stage model of donor search behavior to explain the effects of transparency and exposure on both donor and organization behavior as it regards how donors select organizations. Using both analytical and simulated results I show how donor behavior changes under various market constructions, with implications on total market outcomes and organization behavior discussed.Chapter 4 concludes with an empirical analysis to test the assumptions and results from the models of Chapters 2 and 3. Using an observational data set provided by the online charitable giving marketplace GlobalGiving, fixed effects panel regression and logit models are used to investigate the effects of transparency on both the amount of a donor's gift, and on the likelihood of repeat giving. Results are complicated by discussed validity issues, and in general show that within the context of GlobalGiving proxied transparency does not appear to have a significant practical effect on either the amount of the gift or organization selection by a given donor. While some significance is shown for various constructions, the results are not shown to be robust. A discussion of the results within the context of the donor search model of Chapter 3 is also provided.