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Large all-pay auctions with IPV bidders

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  • Murto, Pauli
  • Välimäki, Juuso

Abstract

This note analyzes different types of all-pay auctions when the number of bidders becomes large. We compute the distributions of the highest bids for the first-price all pay auction and we show that the expected payment made by the winning bidder converges to half of the total payments. In the second-price all-pay auction (the war of attrition), the highest bid amounts to about 35.5% of the total revenues. We also compute the payments for all-pay auctions with multiple prizes.

Suggested Citation

  • Murto, Pauli & Välimäki, Juuso, 2017. "Large all-pay auctions with IPV bidders," Journal of Economic Theory, Elsevier, vol. 169(C), pages 629-640.
    • Handle: RePEc:eee:jetheo:v:169:y:2017:i:c:p:629-640
    DOI: 10.1016/j.jet.2017.03.008
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    References listed on IDEAS

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    More about this item

    Keywords

    All-pay auction; Large auctions;

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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