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Priming the charitable pump: An experimental investigation of two-stage raffles

Author

Listed:
  • Sebastian J. Goerg

    () (Department of Economics, Florida State University)

  • John Lightle

    () (Department of Economics, Florida State University)

  • Dmitry Ryvkin

    () (Department of Economics, Florida State University)

Abstract

We study experimentally two-stage self-financing raffles, a novel class of charity fund-raising mechanisms in which participants can buy tickets in two stages. The proceeds of the first stage are used as the seed money for the second stage. The mechanisms differ by what happens to the tickets purchased in the first stage. In the complete draw down two-stage raffle, the first stage tickets are eliminated from the active pool of tickets, while in the no draw down raffle they remain in the active pool. We find that both two-stage raffles initially perform better than the standard one-stage 50-50 raffle. Over time, the aggregate contribution level in the complete draw down raffle declines and approaches that of the one-stage raffle, while in the no draw down raffle contributions are stable and remain higher than in the other two mechanisms. In both two-stage raffles we observe a positive correlation between the proceeds of the first stage and the number of tickets bought in the second stage. Our results show promise for multi-stage self-financing fund-raising mechanisms, although not necessarily driven by unboundedly rational motives.

Suggested Citation

  • Sebastian J. Goerg & John Lightle & Dmitry Ryvkin, 2013. "Priming the charitable pump: An experimental investigation of two-stage raffles," Working Papers wp2013_05_01, Department of Economics, Florida State University.
  • Handle: RePEc:fsu:wpaper:wp2013_05_01
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    References listed on IDEAS

    as
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    Keywords

    two-stage raffle; charity; experiment;

    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
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers

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