Pramit Ghosh

Competition in Optimal Stopping: Behavioral Insights, with I. Rios. Published at Manufacturing & Service Operations Management (link)

Problem definition: We study settings where agents sequentially search among different options under competition. Motivated by labor markets and the allocation of kidneys from deceased donors, we focus on the effect of (i) the mechanism to collect decisions, that is, whether all agents make their decisions simultaneously or sequentially, and (ii) competition, that is, the number of agents who are searching from a shared pool of options. Methodology/results: We introduce a model of sequential search under competition, in which agents are exogenously prioritized and must decide when to stop their search to maximize the chosen option’s value. We characterize the optimal policy, which defines a sequence of thresholds that dictates when each agent should accept an option based on their priority relative to others still searching and the number of remaining options. Our analysis reveals that neither the mechanism for collecting agents’ decisions nor the number of lower-priority agents influences the optimal policy. To test these predictions, we designed and conducted a laboratory experiment replicating our theoretical model. The results indicate significant deviations from the optimal policy. Moreover, we find that the mechanism significantly affects agents’ decisions due to primarily two drivers: (i) saliency of competition and (ii) frustration. Finally, we identify an “illusion of competition” effect, whereby agents use significantly lower thresholds when the number of agents with lower priority increases. Managerial implications: Our results show that a higher perception of competition and using a simultaneous mechanism (i.e., batch offering) significantly decrease the thresholds that agents use to guide their search, making them stop their search earlier. Thus, clearinghouses that suffer from inefficient discard of options should increase the saliency of competition and use batch offerings to reduce agents’ selectivity and mitigate waste.

Designing Effective Fundraising Campaigns: The Role of Incentives and Solicitation Mechanisms, with I. Rios and A. Qi. Major Revision at Manufacturing & Service Operations Management (link)

Problem definition: Charitable donations are a vital source of funding for nonprofit organizations, enabling them to carry out their mission of addressing social issues and providing support to those in need. To boost contributions, third parties often donate large sums that fundraisers use to incentivize individual donations, with one-to-one matching being the most common mechanism. However, alternative designs may lead to even higher contributions. This paper investigates the effectiveness of two design choices in the context of fundraising: (i) the incentive mechanism, focusing on the two most prevalent ones (i.e., matching and gift unlock); and (ii) the solicitation mechanism, i.e., whether donations occur simultaneously or sequentially. Methodology/Results: We introduce a stylized game-theoretical model where a fundraiser decides the design choices and corresponding design parameters to maximize overall donations. Following the fundraiser's decision, donors, endowed with a certain amount of wealth, make their one-time contribution to the fundraiser. For each design choice, we characterize the equilibrium donations and find the fundraiser's optimal policy. We then compare the overall contribution for all combinations of design choices and find that gift unlock consistently outperforms matching. Moreover, sequential solicitation is the optimal choice with gift unlock, whereas simultaneous solicitation yields higher overall contributions with matching. Furthermore, our simulations indicate that the effectiveness of gift unlock is robust to peer effects and donor participation uncertainty, although high uncertainty shifts the optimal solicitation from sequential to simultaneous. Managerial implications: Our findings indicate that fundraisers should prioritize gift unlock over matching, align the selected incentive mechanism with the optimal solicitation format, and calibrate campaign parameters to maximize donation outcomes. Additionally, fundraisers should leverage interventions designed to heighten social comparisons among donors, thereby stimulating higher overall donations.

Designing Effective Fundraising Campaigns: Behavioral Insights, with I. Rios and A. Qi.

We study the impact of design choices in charitable fundraising on donation behavior and overall outcomes. Motivated by the persistent decline in individual giving in the United States, we focus on two key designs: (i) incentive mechanisms, comparing no financial incentive, matching, and gift unlock, and (ii) the solicitation mechanism, where donors are approached simultaneously or sequentially. We develop a stylized theoretical model in which a budget-constrained fundraiser selects a fundraising design, and donors, endowed with fixed wealth, make one-time contributions to maximize utility. The model characterizes equilibrium donations under each design and predicts that gift unlock yields higher overall donations than matching. To test these predictions, we conduct a controlled laboratory experiment that mirrors the theoretical setup. First, we find that matching increases overall donations relative to the baseline, but reduces individual contributions due to crowding out. Second, gift unlock substantially increases individual and overall donations under simultaneous solicitation but performs poorly under sequential settings due to coordination failures. Third, we show that the effectiveness of each mechanism is shaped not only by the solicitation structure but also by donors’ risk preferences. Our findings offer practical guidance for fundraisers: Gift unlock with simultaneous solicitation works best for smaller, connected, or risk-tolerant donor groups. In contrast, matching is more effective for risk-averse or dispersed donors, especially under sequential solicitation, where contributions are visible. Overall, aligning incentive design with donor behavior is essential for maximizing fundraising impact.

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