Bidding to Give in the Field: Door-to-Door Fundraisers had it Right from the Start

Abstract

In a door-to-door fundraising field experiment, we study the impact of fundraising mechanisms on charitable giving. We approached about 4500 households, each participating in either an all-pay auction, a lottery, a non-anonymous voluntary contribution mechanism (VCM), or an anonymous VCM. In contrast to the VCMs, households competed for a prize in the all-pay auction and the lottery. Although the all-pay auction is the superior fundraising mechanism both in theory and in the laboratory, it raised the lowest revenue per household in the field. Our experiment reveals two potential explanations for this anomaly. First, participation in the all-pay auction is substantially lower than in the other mechanisms while the average donation for those who contribute is only slightly higher. We explore various explanations for this lower participation and favor one that argues that competition in the all-pay mechanism crowds out intrinsic motivations to contribute. In the all-pay auction, most people lose little (compared to the Nash equilibrium) by not participating. Second, the non-anonymity may have a negative effect: conditional on donating, households contribute less in the non-anonymous VCM than in the anonymous VCM. Among the non-anonymous mechanisms, the lottery raises the largest revenue per household. The fact that the anony¬mous VCM scored best is noteworthy, because is the method most used by door-to-door fund raisers.