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Charity Auctions for the Happy Few

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  • Olivier Bos

Abstract

Recent literature has shown that all-pay auctions raise more money for charity than winner-pay auctions. We demonstrate that the first-price and second-price winner-pay auctions outperform the first-price and second-price all-pay auction when bidders are sufficiently asymmetric. To prove it, we consider a framework with complete information. Complete information is realistic and corresponds to events that occur, for instance, in a local service club (such as a voluntary organization) or in a show business dinner.

Suggested Citation

  • Olivier Bos, 2010. "Charity Auctions for the Happy Few," Working Paper Series in Economics 45, University of Cologne, Department of Economics.
  • Handle: RePEc:kls:series:0045
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    References listed on IDEAS

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    1. Edlin Aaron S., 2005. "The Choose-your-Charity Tax: A Way to Incentivize Greater Giving," The Economists' Voice, De Gruyter, vol. 2(3), pages 1-6, August.
    2. Carpenter, Jeffrey & Holmes, Jessica & Matthews, Peter Hans, 2010. "Endogenous participation in charity auctions," Journal of Public Economics, Elsevier, vol. 94(11-12), pages 921-935, December.
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    4. Dan Kovenock & Michael R. Baye & Casper G. de Vries, 1996. "The all-pay auction with complete information (*)," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 8(2), pages 291-305.
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    8. Bos, Olivier, 2016. "Charity auctions for the happy few," Mathematical Social Sciences, Elsevier, vol. 79(C), pages 83-92.
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    Cited by:

    1. Gregor, Martin, 2012. "Contest for power in organizations," Economics Letters, Elsevier, vol. 114(3), pages 280-283.
    2. Bos, Olivier, 2016. "Charity auctions for the happy few," Mathematical Social Sciences, Elsevier, vol. 79(C), pages 83-92.
    3. Bos, Olivier, 2011. "How lotteries outperform auctions," Economics Letters, Elsevier, vol. 110(3), pages 262-264, March.
    4. Fu, Qiang & Lu, Jingfeng, 2013. "Competitive effect of cross-shareholdings in all-pay auctions with complete information," International Journal of Industrial Organization, Elsevier, vol. 31(3), pages 267-277.

    More about this item

    Keywords

    All-pay auctions; charity; complete information; externalities;

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers

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