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All-pay Auctions with Budget Constraints and Fair Insurance

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Author Info
Uwe Dulleck ()
Paul Frijters ()
Konrad Podczeck ()

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Abstract

We study all-pay auctions with budget-constrained bidders who have access to fair insurance before bidding simultaneously over a prize. We characterize a unique equilibrium for the special cases of two bidders and one prize, show existence and a heuristic for finding an equilibrium in the case of multiple bidders and multiple prizes. We end with an example of non-uniqueness of equilibria for the general case of multiple prizes and multiple players.

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Paper provided by University of Vienna, Department of Economics in its series Vienna Economics Papers with number 0605.

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Date of creation: May 2006
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Handle: RePEc:vie:viennp:0605

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Find related papers by JEL classification:
C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior
D42 - Microeconomics - - Market Structure and Pricing - - - Monopoly

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  4. Yasar Barut & Dan Kovenock & Charles N. Noussair, 2002. "A Comparison of Multiple-Unit All-Pay and Winner-Pay Auctions Under Incomplete Information," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(3), pages 675-708, August. [Downloadable!] (restricted)
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  5. Feldman, Mark & Gilles, Christian, 1985. "An expository note on individual risk without aggregate uncertainty," Journal of Economic Theory, Elsevier, vol. 35(1), pages 26-32, February. [Downloadable!] (restricted)
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  9. Loury, Glenn C, 1979. "Market Structure and Innovation," The Quarterly Journal of Economics, MIT Press, vol. 93(3), pages 395-410, August. [Downloadable!] (restricted)
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  1. Wagman, Liad & Conitzer, Vincent, 2008. "Choosing Fair Lotteries to Defeat the Competition," MPRA Paper 10375, University Library of Munich, Germany. [Downloadable!]
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