Thanks to all who participated in the "bidding" for my book on behalf of Save the Children. I have received 146 valid requests, 31 of which came from developing nations. The median contribution was $15, and the mean was $21 (exactly my marginal cost!). The maximum contribution was $145, with a few readers contributing $100 or more.
Here is what the entire distribution of contributions looks like:
Only a minority of "bids" came at $0 (33 out of 146), which is perhaps not a total surprise. But interestingly, those with zero or low bids felt compelled to provide a justification (being a poor student being the most commonly offered one). But of course none was needed on purely rational grounds. Given the rules of the game, the surplus-maximizing thing to do from one's own perspective was to offer a contribution of $0. That's it.
(Unless of course you attach not even an epsilon value to the book, in which case you would not have bothered with putting in a bid at all. Come to think of it, given that I get about 3,000 hits a day, and 146 people responded, should I deduce that a whole lot of people found themselves in this category...? I am now depressed!)
By contrast, those who promised to contribute $20, $40, or even $100 for the book felt they had to provide a rational justification--lest I think less of them, I suppose. One reason for responding with a high bid was that offering nothing or a very small amount would be embarrassing. I would have names and addresses of the cheapskates, and who knows one day we may even meet. (Perhaps this is why many readers stayed away from the experiment even though they would be happy paying a few dollars for the book? Phew!)
An even more common justification for a high "bid" was that since the money is going to a charity, Save the Children, the contribution had to be positive, and perhaps even large. For example, one respondent wrote:
Children's charities always get my $$$. ... I have a young daughter and therefore want a bright future for her, which in part means healthy and happy peers.
This is perhaps more dramatic than how most people put it, but it captures a very commonly expressed sentiment. (This particular person chose to donate $50.)
Well, the economist in me wants to say: stop, you got it wrong! If you value charitable contributions, you should have already maxed out on them to the point where the marginal value (to you) of another dollar of contribution is exactly equal to the marginal cost. My book offer should not want you to make additional contributions. Regardless of the value you attach to charity, the rational thing to do is to offer $0, no more. So you are in fact trying to rationalize what cannot be explained through rational behavior.
But of course the real person in me says, great, we have more money going to Save the Children. How much money? The random sample I have selected yields a total contribution to Save the Children of $411. This is of course way below what the contribution-maximizing selection would have yielded ($1242). But I do not want to change the rules ex post. Instead, what I will do is send additional copies of the book (beyond the 20 I have allocated to the lottery) to all those who put in "bids" of $100 or above. Winners will be hearing from me soon.
Many of you said very nice things about my blog in your responses, which alone made the experiment worthwhile for me.
UPDATE: The New York TImes reports on my experiment.