Individual Behavior In Auctions with Price Proportional Benefits
Auctions with price proportional benefits involve situations in which bidders receive utility from the revenue raised by the auctioneer. We conduct experimental treatments with three classes of induced preferences and find that while bidders' response to incentives is on average consistent with theory, only one class of preferences leads to a significant increase in revenue. We then test for the presence of such preferences in experiments where auction revenue is donated to an actual charity. The latter sessions were conducted with a standard subject pool and with a special subject pool consisting of individuals with a very strong connection to the relevant charity. Subjects with a strong connection to charity evidence slightly more aggressive bidding behavior when the revenue is going to a charity but this is not strong enough to generate a significant increase in revenue. These results suggest that preferences in the natural environment are consistent with the manner of preferences assumed in the theory.
|Date of creation:||Jul 2008|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.coss.fsu.edu/economics/
More information through EDIRC
|Order Information:|| Email: |
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Peter T. L. Popkowski Leszczyc & Michael H. Rothkopf (deceased), 2010. "Charitable Motives and Bidding in Charity Auctions," Management Science, INFORMS, vol. 56(3), pages 399-413, March.
- Andrew Schotter & Allan Corns, 1999.
"Can Affirmative Action Be Cost Effective? An Experimental Examination of Price-Preference Auctions,"
American Economic Review,
American Economic Association, vol. 89(1), pages 291-305, March.
- Corns, Allan & Schotter, Andrew, 1996. "Can Affirmative Action be Cost-Effective? An Experimental Examination of Price-Preference Auctions," Working Papers 96-02, C.V. Starr Center for Applied Economics, New York University.
- Jeffrey Carpenter & Jessica Holmes & PeterHans Matthews, 2008. "Charity auctions: a field experiment," Economic Journal, Royal Economic Society, vol. 118(525), pages 92-113, 01.
- Morgan John & Steiglitz Ken & Reis George, 2003. "The Spite Motive and Equilibrium Behavior in Auctions," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 2(1), pages 1-27, April.
- Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
- Douglas D. Davis & Laura Razzolini & Robert Reilly & Bart J. Wilson, 2003. "Raising Revenues for Charity: Auctions versus Lotteries," Working Papers 0301, VCU School of Business, Department of Economics.
- Jacob K. Goeree & Emiel Maasland & Sander Onderstal & John L. Turner, 2005. "How (Not) to Raise Money," Journal of Political Economy, University of Chicago Press, vol. 113(4), pages 897-926, August.
- Jason Shachat & J. Todd Swarthout, 2003.
"Procurement Auctions for Differentiated Goods,"
Experimental Economics Center Working Paper Series
2006-15, Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University, revised Apr 2009.
When requesting a correction, please mention this item's handle: RePEc:fsu:wpaper:wp2008_07_01. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dmitry Ryvkin)
If references are entirely missing, you can add them using this form.