Last-minute bidding in eBay charity auctions

Consumers are frequently presented opportunities to purchase products that are linked to charitable causes, green production, or fair trade practices. In Elfenbein and McManus (forthcoming) we demonstrate that consumers are willing to pay a premium for these items by analyzing a hand-matched data set of identical items sold in charity and non-charity auctions on eBay. This premium may occur because consumers receive a private benefit from winning a charity auction, such as egotistical “warm glow” (Andreoni, 1989), because bidders value charity auction revenue as a public good, or both. Models of bid timing in online consumer auctions suggest that bid times may reveal some aspects of bidder preferences, specifically, whether bidders view charity auction revenue as a public good. In particular, sophisticated bidders who value overall auction revenue will be less likely to bid at the last minute (“snipe”) and may be inclined to bid earlier to elicit more bidding from naïve bidders. While the data in Elfenbein and McManus (forthcoming) allow some coarse measurement of bid timing, they are insufficient to examine truly last-minute bidding, as sniping is generally described. For the present paper we construct a new data set specifically designed for this purpose.