Increasing Fundraising Success by Decreasing Donor Choice

Suggested contributions, membership categories, and discrete, incremental thank you gifts are devices often used by benevolent associations that provide public goods. Such devices focus donations at discrete levels, thereby effectively limiting the donors' freedom to give. We study the effects on overall donations of the trade‐off between rigid schemes that severely restrict the choices of contribution on the one hand, and flexible membership contracts on the other, taking into account the strategic response of contributors whose values for the public good are private information. We show flexibility dominates when (i) the dispersion of donors' taste for the public good increases, (ii) the number of potential donors increases, and (iii) there is greater funding by an external authority. Our theoretical results are consistent with three basic patterns we discover in the membership schemes of National Public Radio stations: stations offer a larger number of suggested contribution levels—a proxy for flexibility—as (i) the incomes of the population served become more diverse, (ii) the population of the coverage area increases, and (iii) there is greater external support from the Corporation for Public Broadcasting.     

Communication and Early Contributions

In the context of the voluntary provision of a public good, I study the interaction of communication and dynamics in contributions. I modify the cheap talk, joint‐project framework of Agastya, Menezes, and Sengupta (2007) by considering early contributions that precede communication and by assuming partially funded projects are not completely worthless. First, I show environments in which, without early contributions, parties cannot be trusted to communicate sincerely, so that the joint endeavor always fails. Then, for the same environments, I demonstrate that early contributions can create the conditions for mutual trust, improve the outcome of subsequent communication, and eventually increase welfare. This trust‐building role of early contributions matches well with the aims that negotiation scholars attribute to preconditions for negotiations and to preliminary concessions.     

Optimal Monetary Policy Rules and House Prices: The Role of Financial Frictions

We probe the scope for reacting to house prices in simple and implementable monetary policy rules, using a New Keynesian model with a housing sector and financial frictions on the household side. We show that the social‐welfare‐maximizing monetary policy rule features a reaction to house price variations, when the latter are generated by housing demand or financial shocks. The sign and size of the reaction crucially depend on the degree of financial frictions in the economy. When the share of constrained agents is relatively small, the optimal reaction is negative, implying that the central bank must move the policy rate in the opposite direction with respect to house prices. However, when the economy is characterized by a sufficiently high average loan‐to‐value ratio, then it becomes optimal to counter house price increases by raising the policy rate.     

Non-Atomistic Wage Setters and Monetary Policy in a New Keynesian Framework

This paper extends an otherwise standard New Keynesian (NK) model to allow for the presence of large wage setters. Building on monetary models from an earlier generation, I contribute to the NK literature by adding some new insight. It is shown that once the presence of large wage setters is taken into account, the degree of wage setting centralization and the aggressiveness of the central bank in stabilizing inflation jointly affect steady state employment. Because of this interaction, the benefits associated with inflation stabilization increase in the centralization of the wage bargaining process.     

Capital Budgeting versus Market Timing: An Evaluation Using Demographics

Using demand shifts induced by demographics, we evaluate capital budgeting and market timing. Capital budgeting implies that industries anticipating positive demand shifts in the near future should issue more equity to finance greater capacity. To the extent that demand shifts in the distant future are not incorporated into equity prices, market timing implies that industries anticipating positive shifts in the distant future should issue less equity due to undervaluation. The evidence supports both theories: new listings and equity issuance respond positively to demand shifts during the next 5 years and negatively to demand shifts further in the future.     

Household Leverage

I propose a life‐cycle model where a finitely lived risk‐averse household finances its housing investment by opting to provide a down payment. Given that the household may default, risk‐neutral lenders efficiently charge a default premium to hedge against expected losses. This has two major consequences. First, the higher the house price volatility, the higher the down payment the household provides to decrease the volatility of the equity share in the house. Second, in the presence of borrowing constraints, higher risk of unemployment persistence and/or a substantial drop in labor income decreases the leveraged position the household takes on.     

Does Consumer Protection Enhance Disclosure Credibility in Reward Crowdfunding?

We study how the interplay of disclosure and regulation shapes capital allocation in reward crowdfunding. Using data from Kickstarter, the largest online reward crowdfunding platform, we show that, even in the absence of clear regulation and enforcement mechanisms, disclosure helps entrepreneurs access capital for their projects and bolsters engagement with potential project backers, consistent with the notion that disclosure mitigates moral hazard. We further document that, subsequent to a change in Kickstarter's terms of use that increases the threat of consumer litigation, the association between project funding and disclosure becomes stronger. This evidence suggests that consumer protection regulation enhances the perceived credibility of disclosure. We find the effect of the change in terms of use to be more pronounced in states with stricter consumer protection regulations. Taken together, our findings yield important insights on the role of disclosure, as well as on the potential effects of increased regulation on crowdfunding platforms.     

La reglamentación y el futuro del trabajo. La relación de trabajo como factor de innovación

La transformación digital y la reorganización de la empresa han generado fórmulas distintas de la relación de trabajo típica. Frente al modelo de disrupción digital que proclama la inadecuación del marco jurídico a los modelos de trabajo y de negocio «innovadores», en este artículo se aboga por la reglamentación laboral como factor de innovación. La relación de trabajo es un instrumento flexible y las formas típicas de empleo resultan rentables y eficientes. Además de permitir el pleno ejercicio de la prerrogativa empresarial y la flexibilidad interna en la gestión del trabajo, constituyen un mecanismo eficaz de formación y capacitación.     

Credit and Banking in a DSGE Model of the Euro Area

This paper studies the role of credit supply factors in business cycle fluctuations using a dynamic stochastic general equilibrium (DSGE) model with financial frictions enriched with an imperfectly competitive banking sector. Banks issue collateralized loans to both households and firms, obtain funding via deposits, and accumulate capital out of retained earnings. Loan margins depend on the banks' capital‐to‐assets ratio and on the degree of interest rate stickiness. Balance‐sheet constraints establish a link between the business cycle, which affects bank profits and thus capital, and the supply and cost of loans. The model is estimated with Bayesian techniques using data for the euro area. The analysis delivers the following results. First, the banking sector and, in particular, sticky rates attenuate the effects of monetary policy shocks, while financial intermediation increases the propagation of supply shocks. Second, shocks originating in the banking sector explain the largest share of the contraction of economic activity in 2008, while macroeconomic shocks played a limited role. Third, an unexpected destruction of bank capital may have substantial effects on the economy.