Introduction to the Special Issue on Leadership,Altruism, and Social Organization

The objective of the conference on “Leadership, Altruism, and Social Organization” was to bring researchers together who were interested in exploring the functioning of the nonprofit sector. The conference and this special issue focus on three themes. First, what causes social and volunteer‐based organizations to successfully compete against a private enterprise? Second, why do individuals or organizations take the lead in providing or securing provision of public goods? Third, what are the consequences of having altruistically motivated agents, and how can such motives be sustained?     

The Effect of Status on Charitable Giving

Fundraisers often start their campaigns by soliciting the wealthier, more recognized, and respected individuals in a community. We examine whether the success of this solicitation ordering in part can be attributed to the fact that it enables individuals to select organizations that have a high‐status donor base. Assuming that individuals prefer to associate with individuals of higher social ranking we use a simple linear model to show that both aggregate donations and earnings are larger when high‐status donors are solicited first. We investigate the predicted comparative statics using the experimental laboratory. Inducing a status differential we reverse the contribution ordering between participants of high and low status. Consistent with current fundraising practice, we find that low‐status followers are likely to mimic donations by high‐status leaders and this encourages high‐status leaders to give. Donations are therefore larger when individuals of high status give before rather than after those of low status.     

Are the Liquidity and Collateral Roles of Asset Bubbles Different?

Several papers explain why asset bubbles are observed when growth is large. These papers differ in the role of the bubble, used to provide liquidities or as collateral in a borrowing constraint. We compare the liquidity and collateral roles of bubbles in an overlapping generations model. When the bubble is deterministic, the equilibrium is identical under these two roles, implying that the same mechanism explains the crowding-in effect of the bubble on growth. With stochastic bubbles, growth is larger when bubbles play the liquidity role, because the burst of a bubble used for liquidity is less damaging to capital investors.