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Endogenous participation in charity auctions

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  • Carpenter, Jeffrey
  • Holmes, Jessica
  • Matthews, Peter Hans

Abstract

Data from a recent field experiment suggests that differences in participation rates are responsible for much of the variations in charity auction revenues across formats. We provide a theoretical framework for the analysis of this and other related results. The model illustrates the limits of previous results that assume full participation and introduces some new considerations to the choice of auction mechanism. It also implies, however, that the data cannot be explained in terms of participation costs alone: there must exist mechanism-specific obstacles to participation.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:pubeco:v:94:y:2010:i:11-12:p:921-935
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    1. Douglas D. Davis & Laura Razzolini & Robert J. Reilly & Bart J. Wilson, 2006. "Raising Revenues for Charity: Auctions Versus Lotteries," Research in Experimental Economics, in: Experiments Investigating Fundraising and Charitable Contributors, pages 47-91, Emerald Group Publishing Limited.
    2. Paulo K. Monteiro & Flavio M. Menezes, 2000. "original papers : Auctions with endogenous participation," Review of Economic Design, Springer;Society for Economic Design, vol. 5(1), pages 71-89.
    3. James Andreoni, 1995. "Warm-Glow versus Cold-Prickle: The Effects of Positive and Negative Framing on Cooperation in Experiments," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(1), pages 1-21.
    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. 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.
    6. Mark Isaac & Svetlana Pevnitskaya & Tim C. Salmon, 2008. "Individual Behavior In Auctions with Price Proportional Benefits," Working Papers wp2008_07_01, Department of Economics, Florida State University.
    7. 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.
    8. Jeffrey Carpenter & Jessica Holmes & PeterHans Matthews, 2008. "Charity auctions: a field experiment," Economic Journal, Royal Economic Society, vol. 118(525), pages 92-113, January.
    9. Samuelson, William F., 1985. "Competitive bidding with entry costs," Economics Letters, Elsevier, vol. 17(1-2), pages 53-57.
    10. Engelbrecht-Wiggans Richard, 1994. "Auctions with Price-Proportional Benefits to Bidders," Games and Economic Behavior, Elsevier, vol. 6(3), pages 339-346, May.
    11. Peter T. L. Popkowski Leszczyc & Michael H. Rothkopf (deceased), 2010. "Charitable Motives and Bidding in Charity Auctions," Management Science, INFORMS, vol. 56(3), pages 399-413, March.
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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. Olivier Bos, 2020. "Charitable asymmetric bidders," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 22(2), pages 320-337, April.
    3. 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.
    4. Bos, Olivier, 2016. "Charity auctions for the happy few," Mathematical Social Sciences, Elsevier, vol. 79(C), pages 83-92.
    5. 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.
    6. 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.
    7. Foster, Joshua & Haley, M. Ryan, 2022. "Charity auctions as assets: Theory and simulations of fundraising risk management in mean-variance space," Socio-Economic Planning Sciences, Elsevier, vol. 83(C).
    8. Carpenter, Jeffrey & Holmes, Jessica & Matthews, Peter Hans, 2011. "Jumping and sniping at the silents: Does it matter for charities?," Journal of Public Economics, Elsevier, vol. 95(5-6), pages 395-402, June.
    9. 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).
    10. 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.
    11. Chen Liang & Murat Tunc & Gordon Burtch, 2024. "The Market Consequences of Perceived Strategic Generosity: An Empirical Examination of NFT Charity Fundraisers," Papers 2401.12064, arXiv.org, revised Dec 2024.
    12. Holzer, Jorge & DePiper, Geret & Lipton, Douglas, 2017. "Buybacks with costly participation," Journal of Environmental Economics and Management, Elsevier, vol. 85(C), pages 130-145.

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