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Charity Auctions: A Field Experimental Investigation

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  • Peter Hans Matthews

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  • Jeffrey Carpenter

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  • Jessica Holmes

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Abstract

Auctions 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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File URL: http://www.middlebury.edu/services/econ/repec/mdl/ancoec/0417.pdf
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Bibliographic Info

Paper provided by Middlebury College, Department of Economics in its series Middlebury College Working Paper Series with number 0417.

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Length: 42 pages
Date of creation: Sep 2004
Date of revision:
Handle: RePEc:mdl:mdlpap:0417

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  9. Gadi Fibich & Arieh Gavious & Aner Sela, 2006. "All-pay auctions with risk-averse players," International Journal of Game Theory, Springer, Springer, vol. 34(4), pages 583-599, November.
  10. ehiel, Philippe & Benny Moldovanu & Ennio Stacchetti, 1994. "How (not) to sell nuclear weapons," Discussion Paper Serie B 288, University of Bonn, Germany.
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Cited by:
  1. Juan Camilo Cárdenas & Rajiv Sethi, 2007. "Attitudes and attributes: a field experiment with public officials and transfer recipients In Colombia," DOCUMENTOS CEDE, UNIVERSIDAD DE LOS ANDES-CEDE 006881, UNIVERSIDAD DE LOS ANDES-CEDE.
  2. Stephan Meier, 2006. "Does framing matter for conditional cooperation? Evidence from a natural field experiment," Natural Field Experiments 00309, The Field Experiments Website.
  3. Christina M. Fong & Erzo F.P. Luttmer, 2007. "What Determines Giving to Hurricane Katrina Victims? Experimental Evidence on Income, Race, and Fairness," NBER Working Papers 13219, National Bureau of Economic Research, Inc.
  4. Juan Camilo Cardenas & Rajiv Sethi, 2010. "Resource Allocation in Public Agencies: Experimental Evidence," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 12(4), pages 815-836, 08.
  5. Yongfu He & Peter Popkowski Leszczyc, 2013. "The impact of jump bidding in online auctions," Marketing Letters, Springer, Springer, vol. 24(4), pages 387-397, December.

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