Jumping and sniping at the silents: Does it matter for charities?

Despite its popularity as a fundraiser for charities, very little research has been done on the bidding and revenue properties of the silent auction. This paper examines the consequences of two behaviors common in silent auctions, jump-bidding and sniping, in laboratory experiments with endogenous participation. Our results suggest that deliberative jumping, the result of impatient bidders attempting to telescope time, tends to increase revenue, while deliberative sniping by experienced bidders tends to decrease it. We also show that when charities can encourage jumping and discourage sniping, silent auctions can perform as well as their sometimes more entertaining but more expensive alternative, the English auction.

Research Highlights
► Despite its popularity as a fundraiser, little is known about the silent auction.
► Jump bidding and sniping, are examined in auctions with endogenous participation.
► Deliberative jumping by impatient bidders tends to increase charity revenue.
► Deliberative sniping by experienced bidders tends to decrease charity revenue.
► If jumping is promoted and sniping is not, silent auctions perform as well as the English auction.