Auctions for Charity: The Curse of the Familiar

Carpenter, J.; Damianov, D.S.; Matthews, P.H.

Abstract

Recently there has been considerable interest in the use of raffles and auctions to fund public goods. Economists have developed theories that predict which of the standard mechanisms should do well and they have run a variety of experiments to test the performance of these mechanisms. One aspect that has been largely overlooked, however, is whether new mechanisms can yield even more of the public good. We run fundraising events in the field at the meetings of a well-known service organization across the United States to examine the properties of five mechanisms: one that is common in the literature (first-price all-pay auction), two that are familiar to practitioners in the field (the English/live auction and the raffle), and two that are new (the “bucket” auction and a lottery-auction hybrid). Consistent with theory, we find large differences in performance between the two most familiar formats, but these disparities are dwarfed by the differentials achieved using the new and less common formats. Our results demonstrate the continued potential of mechanism design to inform the provision of public goods and fundraising.

Citation

Carpenter, J., Damianov, D., & Matthews, P. (2022). Auctions for Charity: The Curse of the Familiar. International Economic Review, 63(3), 1109-1135. https://doi.org/10.1111/iere.12559

• Journal Article Type: Article
• Acceptance Date: Oct 31, 2021
• Online Publication Date: Nov 30, 2021
• Publication Date: Aug 9, 2022
• Deposit Date: Nov 9, 2021
• Publicly Available Date: Dec 1, 2023
• Journal: International Economic Review
• Print ISSN: 0020-6598
• Electronic ISSN: 1468-2354
• Publisher: Wiley
• Peer Reviewed: Peer Reviewed
• Volume: 63
• Issue: 3
• Pages: 1109-1135
• DOI: https://doi.org/10.1111/iere.12559
• Public URL: https://durham-repository.worktribe.com/output/1222618