Public Broadcasting, in its fund drives, often arranges for a corporation to match donations made by its employees. This is likely to ________ the free-rider problem and lead to a ________ level of contribution to the public good.
A) reduce; smaller
B) reduce; larger
C) increase; smaller
D) increase; larger

Question

Quizplus · Accepted Answer

By arranging for a corporation to match donations made by its employees, the free-rider problem is likely to be reduced because individuals are incentivized to contribute knowing that their donation will be doubled. This is likely to lead to a larger level of contribution to the public good because people are more willing to donate when they know their donation will go further.

Public Broadcasting, in Its Fund Drives, Often Arranges for a Corporation