Chinese auction is a type of theall-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 aspennyraffle,chance auction andtricky tray.[2][3]
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]
Chinese auctions are usually conducted during charity events forfundraising.[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]
Some sources consider the term "chinese auction" as derogatory.[2][7]
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