Wars of Attrition with Stochastic Competition
AbstractWe extend the all-pay auctions analysis of Krishna and Morgan (1997) to a stochastic competition setting. In the war of attrition it does not directly follow from the first order condition that the bidding equilibrium strategy is a weighted average of the bidding equilibrium strategies that would be chosen for each number of bidders. This result contrasts with the characterization of the bidding equilibrium strategies in the first-price all-pay auction as well as the winner-pay auctions. Our findings are applicable to future works on contests and charity auctions.
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Bibliographic InfoPaper provided by University of Cologne, Department of Economics in its series Working Paper Series in Economics with number 47.
Date of creation: 24 Feb 2010
Date of revision:
Wars of attrition; number of bidders;
Find related papers by JEL classification:
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-03-06 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Krishna, Vijay & Morgan, John, 1997.
"An Analysis of the War of Attrition and the All-Pay Auction,"
Journal of Economic Theory,
Elsevier, vol. 72(2), pages 343-362, February.
- Vijay Krishna & John Morgan, 1994. "An Analysis of the War of Attrition and the All-Pay Auction," Game Theory and Information 9409002, EconWPA.
- Ronald M. Harstad & Aleksandar Pekec & Ilia Tsetlin, 2005.
"Information Aggregation in Auctions with an Unknown Number of Bidders,"
0605, Department of Economics, University of Missouri.
- Harstad, Ronald M. & Pekec, Aleksandar Sasa & Tsetlin, Ilia, 2008. "Information aggregation in auctions with an unknown number of bidders," Games and Economic Behavior, Elsevier, vol. 62(2), pages 476-508, March.
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- McAfee, R. Preston & McMillan, John, 1987. "Auctions with a stochastic number of bidders," Journal of Economic Theory, Elsevier, vol. 43(1), pages 1-19, October.
- Milgrom, Paul R & Weber, Robert J, 1982.
"A Theory of Auctions and Competitive Bidding,"
Econometric Society, vol. 50(5), pages 1089-1122, September.
- Jacob K. Goeree & Emiel Maasland & Sander Onderstal & John L. Turner, 2005. "How (Not) to Raise Money," Journal of Political Economy, University of Chicago Press, vol. 113(4), pages 897-926, August.
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