Single versus multiple-prize all-pay auctions to finance public goods: An experimental analysis

Faravelli, Marco and Stanca, Luca (2011) Single versus multiple-prize all-pay auctions to finance public goods: An experimental analysis. Journal of Economic Behavior and Organization, In Press . doi:10.1016/j.jebo.2011.10.007

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Author Faravelli, Marco
Stanca, Luca
Title Single versus multiple-prize all-pay auctions to finance public goods: An experimental analysis
Journal name Journal of Economic Behavior and Organization   Check publisher's open access policy
ISSN 0167-2681
Publication date 2011
Year available 2011
Sub-type Article (original research)
DOI 10.1016/j.jebo.2011.10.007
Open Access Status
Volume In Press
Total pages 25
Place of publication Amsterdam, Netherlands
Publisher Elsevier North-Holland
Collection year 2012
Language eng
Formatted abstract
This paper presents an experimental comparison of single and multiple-prize all-pay auctions as fundraising mechanisms to finance public goods. We consider a setting characterized by heterogenous incomes and incomplete information, where single and multiple-prize incentive mechanisms are predicted to raise the same overall contribution, but different contributions by income level. We find that overall, for a given total prize sum, a single large prize generates higher contributions to the public good than three smaller prizes. As predicted by the theory, a single prize provides a more effective incentive for high-income individuals. However, contrary to the theoretical predictions, multiple prizes do not provide a more effective incentive for low-income individuals.
Keyword Incentive mechanisms
Multiple prizes
All-pay auctions
Public goods
Laboratory experiments
Q-Index Code C1
Q-Index Status Confirmed Code
Institutional Status UQ
Additional Notes Available online 20 October 2011.

Document type: Journal Article
Sub-type: Article (original research)
Collections: Official 2012 Collection
School of Economics Publications
 
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Citation counts: TR Web of Science Citation Count  Cited 4 times in Thomson Reuters Web of Science Article | Citations
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Created: Mon, 24 Oct 2011, 16:53:41 EST by Alys Hohnen on behalf of School of Economics