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The war of attrition and the revelation of valuable information

Listed author(s):
  • Kotowski, Maciej H.
  • Li, Fei
Registered author(s):

We provide a simple example demonstrating that the unconditional revelation information in a war of attrition with private budget constraints can decrease expected revenue. Our example suggests that information non-revelation can counteract the adverse revenue impact of budget constraints and almost counterbalance their otherwise negative impact.

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File URL: http://www.sciencedirect.com/science/article/pii/S0165176514002456
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Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 124 (2014)
Issue (Month): 3 ()
Pages: 420-423

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Handle: RePEc:eee:ecolet:v:124:y:2014:i:3:p:420-423
DOI: 10.1016/j.econlet.2014.06.034
Contact details of provider: Web page: http://www.elsevier.com/locate/ecolet

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  1. Aloisio Araujo & Luciano Castro & Humberto Moreira, 2008. "Non-monotoniticies and the all-pay auction tie-breaking rule," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 35(3), pages 407-440, June.
  2. Milgrom, Paul R & Weber, Robert J, 1982. "A Theory of Auctions and Competitive Bidding," Econometrica, Econometric Society, vol. 50(5), pages 1089-1122, September.
  3. Fang, Hanming & Parreiras, Sergio O., 2002. "Equilibrium of Affiliated Value Second Price Auctions with Financially Constrained Bidders: The Two-Bidder Case," Games and Economic Behavior, Elsevier, vol. 39(2), pages 215-236, May.
  4. Maciej H. Kotowski & Fei Li, 2012. "On the Continuous Equilibria of Affiliated-Value, All-Pay Auctions with Private Budget Constraints, Third Version," PIER Working Paper Archive 14-001, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 10 Jan 2014.
  5. Che, Yeon-Koo & Gale, Ian, 2006. "Revenue comparisons for auctions when bidders have arbitrary types," Theoretical Economics, Econometric Society, vol. 1(1), pages 95-118, March.
  6. Kotowski, Maciej H. & Li, Fei, 2014. "On the continuous equilibria of affiliated-value, all-pay auctions with private budget constraints," Games and Economic Behavior, Elsevier, vol. 85(C), pages 84-108.
  7. Yeon-Koo Che & Ian Gale, 1998. "Standard Auctions with Financially Constrained Bidders," Review of Economic Studies, Oxford University Press, vol. 65(1), pages 1-21.
  8. Alex Gershkov, 2009. "Optimal auctions and information disclosure," Review of Economic Design, Springer;Society for Economic Design, vol. 13(4), pages 335-344, December.
  9. Maskin, Eric S., 2000. "Auctions, development, and privatization: Efficient auctions with liquidity-constrained buyers," European Economic Review, Elsevier, vol. 44(4-6), pages 667-681, May.
  10. 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.
  11. Pai, Mallesh M. & Vohra, Rakesh, 2014. "Optimal auctions with financially constrained buyers," Journal of Economic Theory, Elsevier, vol. 150(C), pages 383-425.
  12. Leininger, Wolfgang, 1991. "Patent competition, rent dissipation, and the persistence of monopoly: The role of research budgets," Journal of Economic Theory, Elsevier, vol. 53(1), pages 146-172, February.
  13. Fang, Hanming & Parreiras, Sergio O., 2003. "On the failure of the linkage principle with financially constrained bidders," Journal of Economic Theory, Elsevier, vol. 110(2), pages 374-392, June.
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