Evidence from IPOs show that the initial valuations of entrepreneurial ventures tend to be overvalued (Fisher 2014). One common explanation is irrationality on the part of the entrepreneur characterized by overconfidence (Galasso and Simcoe 2011). We provide a different, rational explanation...

This paper presents a utility function model of donors who need to determine their donation to a charity organization that structures and publishes donations by tiers. By considering the prestige associated with each tier level, our analysis suggests that a tiered scheme generates an incentive...