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Disclosure policies in all-pay auctions with bid caps and stochastic entry

Author

Listed:
  • Chen, Bo
  • Ma, Lijun
  • Zhu, Zhaobo
  • Zhou, Yu

Abstract

This paper examines the effects of disclosing the actual number of bidders in contests with stochastic entry and with resource constraint. We study an all-pay auction with complete information. The auction entails one prize and n potential bidders. Each potential bidder has an exogenous probability of participation and faces an exogenous bid cap. It is shown that the contest organizer prefers fully concealing the information about the number of participating bidders. We extend the result to a case with endogenous entry.

Suggested Citation

  • Chen, Bo & Ma, Lijun & Zhu, Zhaobo & Zhou, Yu, 2020. "Disclosure policies in all-pay auctions with bid caps and stochastic entry," Economics Letters, Elsevier, vol. 186(C).
  • Handle: RePEc:eee:ecolet:v:186:y:2020:i:c:s0165176519304082
    DOI: 10.1016/j.econlet.2019.108805
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    References listed on IDEAS

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    More about this item

    Keywords

    Contest; All-pay auction; Stochastic entry; Bid cap; Disclosure;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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