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All-pay Auctions with Budget Constraints and Fair Insurance

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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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  • Uwe Dulleck & Paul Frijters & Konrad Podczeck, 2006. "All-pay Auctions with Budget Constraints and Fair Insurance," Vienna Economics Papers vie0605, University of Vienna, Department of Economics.
    • Handle: RePEc:vie:viennp:vie0605
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    Cited by:

    1. Liad Wagman & Vincent Conitzer, 2012. "Choosing fair lotteries to defeat the competition," International Journal of Game Theory, Springer;Game Theory Society, vol. 41(1), pages 91-129, February.

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    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly

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