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Fundraising through Competition: Evidence from the Lab

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  • Henrik Orzen

    () (University of Nottingham)

Abstract

This paper investigates fundraising mechanisms for the private provision of a public good which utilize competition as an incentive device for contributions. Theory predicts that “all-pay” competition is particularly effective for fundraising. Within this class of mechanisms different types of lotteries and all-pay auctions are analyzed and ranked. Three all-pay competition mechanisms are then examined in a laboratory experiment vis-à-vis a voluntary contribution mechanism (VCM). All three outperform the VCM and fully efficient outcomes are attained in the last-price all-pay auction after some learning has taken place.

Suggested Citation

  • Henrik Orzen, 2005. "Fundraising through Competition: Evidence from the Lab," Discussion Papers 2005-04, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  • Handle: RePEc:cdx:dpaper:2005-04
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    File URL: http://www.nottingham.ac.uk/cedex/documents/papers/2008-11.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Public Goods; Provision Mechanisms; Experiments; Contests;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior

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