Chinese auction

Chinese auction is a type of the all-pay auction, where the probability of winning depends on the relative size of a participant's bid.^[1] The choice of the winner is done by a lottery, whereby the bidders compete for a higher chance of winning.^[1]

It is also known as penny raffle, chance auction and tricky tray.^[2]^[3]

Etymology

The origin of the name is unknown^[1] but is thought to originated from the 19th Century when the term "Chinese" came to be used to mean cheap and described the inexpensive cost of the raffle and prizes.^[2]^[4]

There is no connection to Chinese culture.^[2]

Significance

Chinese auctions are usually conducted during charity events for fundraising.^[5] Political elections and patent races can be modeled as Chinese auctions, in which the chance of winning is seen as proportional to the amount spent.^[6]

Controversy

Some sources consider the term "chinese auction" as derogatory.^[2]^[7]

References

^ ^a ^b ^c Benegas, Mauricio (1 January 2015). "Bidding behavior in a symmetric Chinese auction". EconomiA. 16 (1): 93–110. doi:10.1016/j.econ.2015.03.003. hdl:10419/179589. ISSN 1517-7580. S2CID 154752695.
^ ^a ^b ^c ^d "Opinion: With Certain Words, Watch Your Mouth". The New York Times. 12 March 2006. Retrieved 28 October 2023.
^ MCLENNAN, Andy (2018). "Efficient disposal equilibria of pseudomarkets" (PDF). Workshop on Game Theory: 8.
^ Carlin, Blair (5 August 2020). "What's a Chinese Auction? Overview & Modern Alternatives". OneCause. Retrieved 2 May 2024.
^ Heiss, Renee (2007). Helping Kids Help: Organizing Successful Charitable Projects. Chicago Review Press. ISBN 978-1-56976-211-0.
^ Shor, Mikhael. "Chinese Auction - Game Theory .net". www.gametheory.net. Retrieved 28 October 2023.
^ "Nothing Chinese about an auction". Lewiston Sun Journal. 12 September 2019. Retrieved 19 July 2024.

[:1-1] Benegas, Mauricio (1 January 2015). "Bidding behavior in a symmetric Chinese auction". EconomiA. 16 (1): 93–110. doi:10.1016/j.econ.2015.03.003. hdl:10419/179589. ISSN 1517-7580. S2CID 154752695.

[:2-2] "Opinion: With Certain Words, Watch Your Mouth". The New York Times. 12 March 2006. Retrieved 28 October 2023.

[3] MCLENNAN, Andy (2018). "Efficient disposal equilibria of pseudomarkets" (PDF). Workshop on Game Theory: 8.

[Carlin_2020_n635-4] Carlin, Blair (5 August 2020). "What's a Chinese Auction? Overview & Modern Alternatives". OneCause. Retrieved 2 May 2024.

[5] Heiss, Renee (2007). Helping Kids Help: Organizing Successful Charitable Projects. Chicago Review Press. ISBN 978-1-56976-211-0.

[6] Shor, Mikhael. "Chinese Auction - Game Theory .net". www.gametheory.net. Retrieved 28 October 2023.

[7] "Nothing Chinese about an auction". Lewiston Sun Journal. 12 September 2019. Retrieved 19 July 2024.

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