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How lotteries outperform auctions

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  • Bos, Olivier

Abstract

In their recent paper Goeree et al. (2005) determine that all-pay auctions are better for fundraising activities than lotteries. We show that the introduction of asymmetry among participants with complete information could reverse this result. Complete information seems well suited to some charity environments.

Suggested Citation

  • Bos, Olivier, 2011. "How lotteries outperform auctions," Economics Letters, Elsevier, vol. 110(3), pages 262-264, March.
    • Handle: RePEc:eee:ecolet:v:110:y:2011:i:3:p:262-264
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    References listed on IDEAS

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    1. Fang, Hanming, 2002. "Lottery versus All-Pay Auction Models of Lobbying," Public Choice, Springer, vol. 112(3-4), pages 351-371, September.
    2. Frode Meland & Odd Straume, 2007. "Outsourcing in contests," Public Choice, Springer, vol. 131(3), pages 315-331, June.
    3. Bos, Olivier, 2016. "Charity auctions for the happy few," Mathematical Social Sciences, Elsevier, vol. 79(C), pages 83-92.
    4. Arthur J.H.C. Schram & Sander Onderstal, 2009. "Bidding To Give: An Experimental Comparison Of Auctions For Charity," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 50(2), pages 431-457, May.
    5. Henrik Orzen, 2005. "Fundraising through Competition: Evidence from the Lab," Discussion Papers 2005-04, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    6. John Morgan, 2000. "Financing Public Goods by Means of Lotteries," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 67(4), pages 761-784.
    7. Maxim Engers & Brian McManus, 2007. "Charity Auctions," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 48(3), pages 953-994, August.
    8. 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.
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    1. Sander Onderstal & Arthur J.C. Schram & Adriaan R. Soetevent, 2011. "Bidding to give in the Field: Door-to-Door Fundraisers had it right from the Start," Tinbergen Institute Discussion Papers 11-070/1, Tinbergen Institute, revised 10 Nov 2011.
    2. Yosef Mealem & Shmuel Nitzan, 2014. "Equity and effectiveness of optimal taxation in contests under an all-pay auction," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 42(2), pages 437-464, February.
    3. Gregor, Martin, 2012. "Contest for power in organizations," Economics Letters, Elsevier, vol. 114(3), pages 280-283.
    4. Giebe, Thomas & Schweinzer, Paul, 2014. "Consuming your way to efficiency: Public goods provision through non-distortionary tax lotteries," European Journal of Political Economy, Elsevier, vol. 36(C), pages 1-12.
    5. Bos, Olivier & Gomez-Martinez, Francisco & Onderstal, Sander & Truyts, Tom, 2021. "Signalling in auctions: Experimental evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 187(C), pages 448-469.
    6. Bos, Olivier, 2016. "Charity auctions for the happy few," Mathematical Social Sciences, Elsevier, vol. 79(C), pages 83-92.
    7. Paan Jindapon & Zhe Yang, 2020. "Free riders and the optimal prize in public‐good funding lotteries," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 22(5), pages 1289-1312, September.
    8. Lorentziadis, Panos L., 2016. "Optimal bidding in auctions from a game theory perspective," European Journal of Operational Research, Elsevier, vol. 248(2), pages 347-371.
    9. Onderstal, Sander & Schram, Arthur J.H.C. & Soetevent, Adriaan R., 2014. "Reprint of: Bidding to give in the field," Journal of Public Economics, Elsevier, vol. 114(C), pages 87-100.
    10. Damianov, Damian S., 2015. "Should lotteries offer discounts on multiple tickets?," Economics Letters, Elsevier, vol. 126(C), pages 84-86.
    11. Damian S. Damianov & Ronald Peeters, 2018. "Prize‐Based Mechanisms For Fund‐Raising: Theory And Experiments," Economic Inquiry, Western Economic Association International, vol. 56(3), pages 1562-1584, July.
    12. Brookins, Philip & Jindapon, Paan, 2021. "Risk preference heterogeneity in group contests," Journal of Mathematical Economics, Elsevier, vol. 95(C).
    13. Embrey, M.S. & Mengel, F. & Peeters, R.J.A.P., 2012. "Strategic commitment and cooperation in experimental games of strategic complements and substitutes," Research Memorandum 051, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    14. Onderstal, Sander & Schram, Arthur J.H.C. & Soetevent, Adriaan R., 2013. "Bidding to give in the field," Journal of Public Economics, Elsevier, vol. 105(C), pages 72-85.

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