This paper studies incentivized voluntary contributions to a charitable activity. Motivated by the market for blood donations in Germany, we study a setting where different incentives coexist and agents can choose to donate without receiving monetary compensation. This lets agents reveal and signal their individual preferences through their actions. In a model that interacts image concerns of agents with intrinsic and extrinsic incentives to donate, we show that this setting can bring about efficiency gains in the collection similar to those deriving from self-selection in second-degree price discrimination. We develop a laboratory experiment to test our theoretical predictions under controlled conditions. Results show that a collection system where compensation can be turned down can improve the efficiency of collection. Introducing the choice to be compensated does not crowd out unpaid donations. A significant share of donors chooses to donate without being compensated. Heterogeneity in treatment effects suggests gender-specific preferences over signaling.
We use a field experiment to study how social image concerns affect pledges to engage in a charitable activity. We work with two different blood banks and a municipal government in Germany to offer sign-ups for human whole blood donations. Motivated by a simple signaling framework, we randomly vary the type of organization to donate to and the visibility of the pledge. Our setting also provides natural variation in the group of people that form the "audience" for social image concerns. We find evidence for strong social image concerns when subjects are asked in public whether they would like to pledge a donation with a well-known charity. Pledges of our subjects do not to induce any charitable giving. Almost all subjects renege on their pledge, with no detectable differences between treatments.