Charitable Asymmetric Bidders

Abstract

Recent papers show that all-pay auctions are better at raising money for charity than first-price auctions with symmetric bidders and under incomplete information. Yet, this result is lost with sufficiently asymmetric bidders and under complete information. In this paper, we consider a framework on charity auctions with asymmetric bidders under some incomplete information. We find that all-pay auctions still earn more money than first-price auction. Thus, all-pay auctions should be seriously considered when one wants to organize a charity auction. Keywords: All-pay auctions, Charity, Externalities

JEL codes