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Charity Auctions: A Field Experimental Investigation
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Charity Auctions: A Field Experimental Investigation

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  • Peter Hans Matthews
  • Jeffrey Carpenter
  • Jessica Holmes

Abstract

Auctions are a popular way to raise money for charities, but relatively little is known, either theoretically or empirically, about the properties of charity auctions. The small theoretical literature suggests that the all-pay auction should garner more money than winner-pay auctions. We conduct field experiments to test which sealed bid format, first price, second price or all-pay raises the most money. Our experiment suggests that both the all-pay and second price formats are dominated by the first price auction. Our design also allows us to identify differential participation as the source of the difference between existing theory and the field. To conclude, we show that a model of charity auctions augmented by an endogenous participation decision predicts the revenue ordering that we see in the field.

Suggested Citation

  • Peter Hans Matthews & Jeffrey Carpenter & Jessica Holmes, 2004. "Charity Auctions: A Field Experimental Investigation," Middlebury College Working Paper Series 0417, Middlebury College, Department of Economics.
    • Handle: RePEc:mdl:mdlpap:0417
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    References listed on IDEAS

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    Cited by:

    1. Meier Stephan, 2005. "Does Framing Matter for Conditional Cooperation? Evidence from a Natural Field Experiment," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(2), pages 1-21, December.
    2. Stephan Meier, 2005. "Does framing matter for conditional cooperation? Evidence from a natural field experiment," Natural Field Experiments 00309, The Field Experiments Website.
    3. Christina Fong & Erzo Luttmer, 2007. "What determines giving to hurricane katrina victims? Experimental evidence on income, race, and fairness," Artefactual Field Experiments 00046, The Field Experiments Website.
    4. Jeffrey Carpenter & Jessica Holmes & PeterHans Matthews, 2008. "Charity auctions: a field experiment," Economic Journal, Royal Economic Society, vol. 118(525), pages 92-113, January.
    5. Juan Camilo Cardenas & Rajiv Sethi, 2010. "Resource Allocation in Public Agencies: Experimental Evidence," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 12(4), pages 815-836, August.
    6. Yongfu He & Peter Popkowski Leszczyc, 2013. "The impact of jump bidding in online auctions," Marketing Letters, Springer, vol. 24(4), pages 387-397, December.
    7. Juan Camilo Cárdenas & Rajiv Sethi, 2007. "Attitudes and attributes: a field experiment with public officials and transfer recipients In Colombia," Documentos CEDE 6881, Universidad de los Andes, Facultad de Economía, CEDE.

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    More about this item

    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

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