Effect of Crisis Colocation on Online Prosocial Behavior

In this study, we examine how a project owner’s colocation with a crisis influences the chances of their project securing requisite funding. Our study draws upon and extends several streams of work, particularly the importance of owners’ location and the role of crisis in online prosocial behavior, namely online donations. Further, we project and empirically test an important theoretical tension. On the one hand, the altruism effect predicts that beneficiaries colocated with a crisis will likely attract more donations. On the other hand, the bystander effect indicates that donors may perceive lower importance of their contribution as the responsibility of aiding the affected gets distributed. Thus, the effect of crisis colocation on the beneficiary’s project is equivocal, requiring empirical assessment. We address this tension empirically using the occurrence of a hurricane as the external crisis coupled with coarsened exact matching. Drawing on a donation platform dataset that facilitates schools in the US to seek funds, we find empirical support for the bystander effect. Additionally, we find that the baseline effect is contingent on the racial makeup of the beneficiary’s location and the extent to which a crisis occurs abruptly. Our study has implications for the theory and practice of managing online prosocial behavior.