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Bidding to give in the field

Author

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  • Onderstal, Sander
  • Schram, Arthur J.H.C.
  • Soetevent, Adriaan R.

Abstract

In a door-to-door fundraising field experiment, we study the impact of fundraising mechanisms on charitable giving. We approached about 4500 households, each participating in an all-pay auction, a lottery, a non-anonymous voluntary contribution mechanism (VCM), or an anonymous VCM. In contrast to the VCMs, households in the all-pay auction and the lottery competed for a prize. Although the all-pay auction is the superior fundraising mechanism both in theory and in the laboratory, it did not raise the highest revenue per household in the field and even raised significantly less than the anonymous VCM. Our experiment reveals that this can be attributed to substantially lower participation in the all-pay auction than in the other mechanisms while the average donation for those who contribute is only slightly (and statistically insignificantly) higher. We explore various explanations for this lower participation and favor one that argues that competition in the all-pay mechanism crowds out intrinsic motivations to contribute.

Suggested Citation

  • Onderstal, Sander & Schram, Arthur J.H.C. & Soetevent, Adriaan R., 2013. "Bidding to give in the field," Journal of Public Economics, Elsevier, vol. 105(C), pages 72-85.
    • Handle: RePEc:eee:pubeco:v:105:y:2013:i:c:p:72-85
    DOI: 10.1016/j.jpubeco.2013.04.011
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    References listed on IDEAS

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    1. Carpenter, Jeffrey & Holmes, Jessica & Matthews, Peter Hans, 2014. "“Bucket auctions” for charity," Games and Economic Behavior, Elsevier, vol. 88(C), pages 260-276.
    2. Emmanuel Dechenaux & Dan Kovenock & Roman Sheremeta, 2015. "A survey of experimental research on contests, all-pay auctions and tournaments," Experimental Economics, Springer;Economic Science Association, vol. 18(4), pages 609-669, December.
    3. Grieco, Daniela & Faillo, Marco & Zarri, Luca, 2017. "Enforcing cooperation in public goods games: Is one punisher enough?," Journal of Economic Psychology, Elsevier, vol. 61(C), pages 55-73.
    4. Chuan, Amanda & Samek, Anya Savikhin, 2014. "“Feel the Warmth” glow: A field experiment on manipulating the act of giving," Journal of Economic Behavior & Organization, Elsevier, vol. 108(C), pages 198-211.
    5. Bos, Olivier & Gomez-Martinez, Francisco & Onderstal, Sander & Truyts, Tom, 2021. "Signalling in auctions: Experimental evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 187(C), pages 448-469.
    6. Faravelli, Marco & Stanca, Luca, 2014. "Economic incentives and social preferences: Causal evidence of non-separability," Journal of Economic Behavior & Organization, Elsevier, vol. 108(C), pages 273-289.
    7. Duffy, John & Matros, Alexander, 2021. "All-pay auctions versus lotteries as provisional fixed-prize fundraising mechanisms: Theory and evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 192(C), pages 434-464.
    8. 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).
    9. Castillo, Marco & Petrie, Ragan, 2020. "Optimal Incentives to Give," IZA Discussion Papers 13321, Institute of Labor Economics (IZA).
    10. Gallier, Carlo & Reif, Christiane & Römer, Daniel, 2014. "Consistent or balanced? On the dynamics of voluntary contributions," ZEW Discussion Papers 14-060, ZEW - Leibniz Centre for European Economic Research.
    11. Fosgaard, Toke R. & Soetevent, Adriaan R., 2022. "I will donate later! A field experiment on cell phone donations to charity," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 549-565.
    12. Damian S. Damianov & Ronald Peeters, 2018. "Prize‐Based Mechanisms For Fund‐Raising: Theory And Experiments," Economic Inquiry, Western Economic Association International, vol. 56(3), pages 1562-1584, July.
    13. 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).
    14. Roel van Veldhuizen & Hessel Oosterbeek & Joep Sonnemans, 2014. "Peers at Work: From the Field to the Lab," Tinbergen Institute Discussion Papers 14-051/I, Tinbergen Institute.
    15. Carpenter, Jeffrey P. & Matthews, Peter Hans, 2015. "Incentives and the Design of Charitable Fundraisers: Lessons from a Field Experiment," IZA Discussion Papers 8952, Institute of Labor Economics (IZA).
    16. Carpenter, Jeffrey & Matthews, Peter Hans, 2017. "Using raffles to fund public goods: Lessons from a field experiment," Journal of Public Economics, Elsevier, vol. 150(C), pages 30-38.
    17. Jeffrey Carpenter & Damian S. Damianov & Peter Hans Matthews, 2022. "Auctions For Charity: The Curse Of The Familiar," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 63(3), pages 1109-1135, August.

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    More about this item

    Keywords

    Charitable fundraising; Field experiment; Auction; Lottery; Voluntary contribution mechanism;
    All these keywords.

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • 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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