When the Poor Widows Two Mites Effect Is Greater than Bill Gates Million Dollar Effect

Abstract

ABSTRACT

When the Poor Widows Two Mites Effect Is Greater than Bill Gates Million Dollar Effect

Moon-Kyung Cha Youjae Yi, PhD. advisor College of Business Administration The Graduate School of Seoul National University

How can we explain the Poor Widows Two Mites Effect in the donation context? Previous research has focused on high status donor effect based on identification theory. However, those studies only investigated other donor effects in the face-to-face situation, without considering target donors own social status. This study attempts to fill the gap between the theory and the phenomenon with Korean and U.S. on/off-line respondents from varied backgrounds. In this study, I explore the differential effects low status donor and high status donor has on donation behavior. For this purpose, this research has conducted 5 experiments. The results are as follows: First, this research tested the prediction of relatively stronger effect of low status donor, compared to high status donor in an experimental setting (Study 1). Second, other donor status affects target donors giving behavior through self-identification and self-reflection (Study 2). Third, other donor status and the target donor status jointly affects charitable giving through self-identification and self-reflection (Study 3). The results reveal previous donors of low status strongly affect charitable giving regardless of target donor status, while previous donors of high status had an impact on donations only when the target donor also held high status. The results demonstrated the moderating role of income inequality (Study 4A, 4B). Other donors of lower status, relative to the target donor, has greater effect on giving behavior than higher status donor does, especially when the society is unequal. Conversely, this effect is weakened when the society is equal. The research findings suggest many implications for marketers and researchers. Limitations and future research ideas are also discussed.