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Bidding behaviors in charity auctions

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Abstract

This paper investigates the importance of bidder types and product types in online charity auctions. Through a large-scale controlled field experiment, the authors identify charitable and non-charitable bidders, and investigate bidding activities in charity and non-charity auctions. Results show that charitable bidders are willing to pay a significant premium in charity auctions, and bid more persistently, continuing to bid in future charity auctions even after losing one. In addition, through the use of a covert agent bidder, this study provides evidence that charitable bidders voluntarily drive up the price in charity auctions, regardless of whether they win the auction. Finally, the authors find that higher value products attain a lower charitable premium relative to their retail value, consistent with diminishing returns to giving.

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Notes

  1. It is important to note that since the charity premium is measured based on the actual bidding behavior, we do not include this measure in our model. Instead it is used to perform separate analyses for charitable and non-charitable bidders.

  2. For those who did not place a bid in a charity and non-charity auction for the same product, we used the percentage of total bids made in charity auctions. Bidders with more than 50 % of bids made in charity auctions were classified as charitable bidders. We also estimated results excluding the bidders for whom we could not calculate the index, and the results were similar.

  3. All p values < .05, for the difference in WTP between charity and non-charity auctions for low and high value products for charitable and non-charitable bidder (except for the difference between charity and non-charity auctions for high value products for non-charitable bidders).

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Authors and Affiliations

  1. Department of Marketing, Business Economics and Law, University of Alberta, Edmonton, AB, T6G 2R6, Canada

    Peter T. L. Popkowski Leszczyc

  2. Desautels Faculty of Management, McGill University, Montreal, QC, T3A 1G5, Canada

    Chun Qiu

  3. Department of Marketing, School of International Business Administration, Shanghai University of Finance and Economics, 777 Guo Ding Road, Shanghai, 200433, China

    Shenyu Li

  4. Former Smeal Chaired Professor of Supply Chain and Information Systems, Pennsylvania State University, University Park, PA, 16802-3603, USA

    Michael H. Rothkopf

  5. Renmin University of China, Beijing, China

    Peter T. L. Popkowski Leszczyc

Authors
  1. Peter T. L. Popkowski Leszczyc
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  2. Chun Qiu
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  3. Shenyu Li
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  4. Michael H. Rothkopf
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Corresponding author

Correspondence to Peter T. L. Popkowski Leszczyc.

Additional information

This research was supported by grants from the Social Sciences and Humanities Research Council of Canada, the School of Retailing Walmart Research Seed Grant, as well as a University of Alberta Nova Faculty Fellowship. We thank Gary Lilien, Junjun Xie, Leo Wong, and the seminar participants at Pennsylvania State University, University of Maryland, Rutgers University, University at California at Berkeley and HEC Paris for helpful comments and suggestions.

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Popkowski Leszczyc, P.T.L., Qiu, C., Li, S. et al. Bidding behaviors in charity auctions. Mark Lett 26, 17–28 (2015). https://doi.org/10.1007/s11002-013-9264-z

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