Charity Auctions: A Field Experimental Investigation

44 Pages Posted: 4 Oct 2004

See all articles by Jeffrey P. Carpenter

Jeffrey P. Carpenter

Middlebury College - Department of Economics; IZA Institute of Labor Economics

Jessica Holmes

Middlebury College

Peter Hans Matthews

Middlebury College - Department of Economics

Date Written: October 2004

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.

Keywords: auction, charity, participation, field experiment

JEL Classification: C93, D44, D64

Suggested Citation

Carpenter, Jeffrey P. and Holmes, Jessica and Matthews, Peter Hans, Charity Auctions: A Field Experimental Investigation (October 2004). IZA Discussion Paper No. 1330. Available at SSRN: https://ssrn.com/abstract=599890

Jeffrey P. Carpenter (Contact Author)

Middlebury College - Department of Economics ( email )

Munroe Hall
Middlebury, VT 05753
United States
802-443-3241 (Phone)
802-443-2084 (Fax)

HOME PAGE: http://community.middlebury.edu/~jcarpent/index.ht

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Jessica Holmes

Middlebury College ( email )

Middlebury, VT 05753

Peter Hans Matthews

Middlebury College - Department of Economics ( email )

Munroe Hall
Middlebury, VT 05753
United States
802 443-5591 (Phone)
802 443-2084 (Fax)

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