published in: Economic Journal, 2008, 118 (525), 92-113
Auctions are a popular way to raise money for charities, but relatively little is known, either
theoretically or empirically, about the properties of charity auctions. The small theoretical
literature suggests that the all-pay auction should garner more money than winner-pay
auctions. We conduct field experiments to test which sealed bid format, first price, second
price or all-pay raises the most money. Our experiment suggests that both the all-pay and
second price formats are dominated by the first price auction. Our design also allows us to
identify differential participation as the source of the difference between existing theory and
the field. To conclude, we show that a model of charity auctions augmented by an
endogenous participation decision predicts the revenue ordering that we see in the field.
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