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“Bucket auctions” for charity

Author

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  • Carpenter, Jeffrey
  • Holmes, Jessica
  • Matthews, Peter Hans

Abstract

Donations in-kind can be a mixed blessing for charities, who are often more adept at solicitation than resale. Many organizations rely on raffles to turn donations into cash, but auctions are also common. Theory predicts that all-pay mechanisms should produce more revenue than winner-pay mechanisms, but the empirical literature is thin and inconclusive. Drawing on both theoretical insights and behavioral intuition, we examine another all-pay mechanism, the “bucket auction,” and show that it generates more revenue than other standard mechanisms, both in theory and in the lab. We hope, therefore, that this format, and others like it, will attract the interest of fundraisers.

Suggested Citation

  • Carpenter, Jeffrey & Holmes, Jessica & Matthews, Peter Hans, 2014. "“Bucket auctions” for charity," Games and Economic Behavior, Elsevier, vol. 88(C), pages 260-276.
    • Handle: RePEc:eee:gamebe:v:88:y:2014:i:c:p:260-276
    DOI: 10.1016/j.geb.2014.09.007
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    References listed on IDEAS

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    Cited by:

    1. Foster, Joshua, 2020. "Loss aversion and sunk cost sensitivity in all-pay auctions for charity: Theory and experiments," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 84(C).
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    3. Foster, Joshua & Haley, M. Ryan, 2022. "Charity auctions as assets: Theory and simulations of fundraising risk management in mean-variance space," Socio-Economic Planning Sciences, Elsevier, vol. 83(C).

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    Keywords

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    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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