Charity Auctions: A Field Experimental Investigation
AbstractAuctions are a popular way to raise money for charities, but relatively little is known, either theoretically or empirically, about the properties of charity auctions. The small theoretical literature suggests that the all-pay auction should garner more money than winner-pay auctions. We conduct field experiments to test which sealed bid format, first price, second price or all-pay raises the most money. Our experiment suggests that both the all-pay and second price formats are dominated by the first price auction. Our design also allows us to identify differential participation as the source of the difference between existing theory and the field. To conclude, we show that a model of charity auctions augmented by an endogenous participation decision predicts the revenue ordering that we see in the field.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1330.
Length: 44 pages
Date of creation: Oct 2004
Date of revision:
Publication status: published in: Economic Journal, 2008, 118 (525), 92-113
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Other versions of this item:
- Peter Hans Matthews & Jeffrey Carpenter & Jessica Holmes, 2004. "Charity Auctions: A Field Experimental Investigation," Middlebury College Working Paper Series 0417, Middlebury College, Department of Economics.
- C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy
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