Charity Auctions for the Happy Few

Bos, Olivier (2015): Charity Auctions for the Happy Few.

Abstract

Recent literature has shown that all-pay auctions raise more money for charity than either winner-pay auctions or lotteries. We demonstrate that first-price and second-price winner- pay auctions have a better revenue performance than first-price and second-price all-pay auctions when bidders are sufficiently asymmetric. Lotteries can also provide higher revenue than all-pay auctions. To prove this, we consider a framework with complete information. Complete information is helpful and may reflect events that occur, for instance, in a local service club (such as a voluntary organization) or at a show-business dinner.

• Item Type: MPRA Paper
• Language: English
• Keywords: All-pay auctions, charity, complete information, externalities
• Subjects: D - Microeconomics > D4 - Market Structure, Pricing, and Design > D44 - Auctions; D - Microeconomics > D6 - Welfare Economics > D62 - Externalities; D - Microeconomics > D6 - Welfare Economics > D64 - Altruism ; Philanthropy

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