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We report an experiment conducted to gain insight into factors that may affect revenues in English auctions and lotteries, two commonly used charity fund-raising formats…
We report an experiment conducted to gain insight into factors that may affect revenues in English auctions and lotteries, two commonly used charity fund-raising formats. In particular, we examine how changes in the marginal per capita return (MPCR) from the public component of bidding, and how changes in the distribution of values affect the revenue properties of each format. Although we observe some predicted comparative static effects, the dominant result is that lottery revenues uniformly exceed English auction revenues. The similarity of lottery and English auction bids across sales formats appears to drive the excess lottery revenues.
This is the fourth volume in the series Research in Experimental Economics that is organized as a compilation of papers on the same topic. Previous collections, on Emissions Permit Trading (volume 8), Market Power (volume 9) and Field Experiments (volume 10) have been well received, and it has become evident that the organization of these volumes into topical collections serves a useful function. The topic of the current volume, Charitable Auctions and Fundraising, has been a subject of intense policy interest. In recent years private, religious and state organizations have come to rely increasingly on fund-raising activities to generate revenues. Experimental methods provide an ideal context for conducting a dialog between economists, fund-raisers and policymakers regarding the revenue and social consequences of alternative fund-raising methods. The construction of this volume is largely the same as the previous themed volumes in this series. Rather than using an open submission process, we either knew of, or solicited contributions and we provided the editorial reviews.