Philanthropic Campaigns and Customer Behavior: Field Experiments on an Online Taxi Booking Platform

Firms commonly undertake philanthropic campaigns as a means of attracting and retaining customers. Such campaigns often take the form of charity-linked promotions, whereby a firm donates a specific amount to a charitable cause when a customer takes up the promotion through a related purchase. We carried out three field experiments to study such promotions in the context of an online taxi-booking platform. Customers were randomly assigned to different treatment groups, which received either a charity-linked or a discount-based promotion from a range of monetary amounts. Take-up rates for charity-linked promotions were not only much smaller than for discount-based promotions but also less sensitive to the exact amount involved, consistent with a view that the decision to take up a charity-linked promotion was driven in part by a “warm glow” from mere association with giving. We also find a selection effect in promotion take-up: charity-linked promotions were disproportionately taken up by people who had alr...