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Auctions for Charity: The Curse of the Familiar

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

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Authors

J. Carpenter

P.H. Matthews



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.

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

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Copyright Statement
This is the peer reviewed version of the following article: Carpenter, J., Damianov, D. S. & Matthews, P. H. (2022). Auctions for Charity: The Curse of the Familiar. International Economic Review 63(3): 1109-1135., which has been published in final form at https://doi.org/10.1111/iere.12559. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions. This article may not be enhanced, enriched or otherwise transformed into a derivative work, without express permission from Wiley or by statutory rights under applicable legislation. Copyright notices must not be removed, obscured or modified. The article must be linked to Wiley’s version of record on Wiley Online Library and any embedding, framing or otherwise making available the article or pages thereof by third parties from platforms, services and websites other than Wiley Online Library must be prohibited.





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