Signaling Virtue: Charitable Behavior Under Consumer Elective Pricing

Two field experiments examined generosity under consumer elective pricing. In shared social responsibility (SSR), consumers choose how much to pay, knowing that a percentage of their payment goes to support a charitable cause. Replicating past research, consumers in our experiments were sensitive to the presence of charitable giving, paying more when a portion of their payment went to charity. Notably, however, they were largely insensitive to the percentage of payment allocated to charity-customers paid little more when 99% of the payment went to charity than when only 1% went to charity. Neither self-selection nor social pressure fully explained higher payments under SSR.