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Silent Interests and All-Pay Auctions Author info | Abstract | Publisher info | Download info | Related research | Statistics Kai A. Konrad ()
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If firms compete in all-pay auctions with complete information, silent shareholdings introduce asymmetric externalities into the all-pay auction framework. If the strongest firm owns a large share in the second strongest firm, this may make the strongest firm abstain from bidding. As a consequence, equilibrium profits of both firms may increase, but the prize may be allocated less efficiently. The reverse ownership structure is also likely to increase the profits of the firms involved in the ownership relationship but without these negative efficiency effects.
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Paper provided by CESifo GmbH in its series CESifo Working Paper Series with number
CESifo Working Paper No. 1473.
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Date of creation: 2005Date of revision:
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Keywords: all-pay auctions externalities contests silent minority shareholdings ownership structure Other versions of this item:
Find related papers by JEL classification: D44 - Microeconomics - - Market Structure and Pricing - - - Auctions L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
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