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Asymmetric all-pay auctions with interdependent valuations

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  • Siegel, Ron

Abstract

I show that a unique equilibrium exists in an asymmetric two-player all-pay auction with a discrete signal structure, correlated signals, and interdependent valuations. The proof is constructive, and the construction can be implemented as a computer program and be used to derive comparative statics. I also characterize the set of equilibria when a reserve price is introduced.

Suggested Citation

  • Siegel, Ron, 2014. "Asymmetric all-pay auctions with interdependent valuations," Journal of Economic Theory, Elsevier, vol. 153(C), pages 684-702.
  • Handle: RePEc:eee:jetheo:v:153:y:2014:i:c:p:684-702
    DOI: 10.1016/j.jet.2014.03.003
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    References listed on IDEAS

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    1. Jeremy Bulow & Jonathan Levin, 2006. "Matching and Price Competition," American Economic Review, American Economic Association, vol. 96(3), pages 652-668, June.
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    6. Kai A. Konrad, 2004. "Altruism and envy in contests: An evolutionarily stable symbiosis," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 22(3), pages 479-490, June.
    7. PARREIRAS, Sérgio O. & RUBINCHIK-PESSACH, Anna, 2006. "Contests with heterogeneous agents," CORE Discussion Papers 2006004, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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    9. Ron Siegel, 2009. "All-Pay Contests," Econometrica, Econometric Society, vol. 77(1), pages 71-92, January.
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    11. Ron Siegel, 2010. "Asymmetric Contests with Conditional Investments," American Economic Review, American Economic Association, vol. 100(5), pages 2230-2260, December.
    12. Lizzeri, Alessandro & Persico, Nicola, 2000. "Uniqueness and Existence of Equilibrium in Auctions with a Reserve Price," Games and Economic Behavior, Elsevier, vol. 30(1), pages 83-114, January.
    13. Engelbrecht-Wiggans, Richard & Milgrom, Paul R. & Weber, Robert J., 1983. "Competitive bidding and proprietary information," Journal of Mathematical Economics, Elsevier, vol. 11(2), pages 161-169, April.
    14. Ron Siegel, 2014. "Asymmetric Contests with Head Starts and Nonmonotonic Costs," American Economic Journal: Microeconomics, American Economic Association, vol. 6(3), pages 59-105, August.
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    Cited by:

    1. repec:eee:jetheo:v:180:y:2019:i:c:p:135-166 is not listed on IDEAS
    2. Rentschler, Lucas & Turocy, Theodore L., 2016. "Two-bidder all-pay auctions with interdependent valuations, including the highly competitive case," Journal of Economic Theory, Elsevier, vol. 163(C), pages 435-466.
    3. repec:kap:pubcho:v:179:y:2019:i:3:d:10.1007_s11127-018-0568-7 is not listed on IDEAS
    4. Sidartha Gordon & Alessandro Riboni, 2015. "Doubts and Dogmatism in Conflict Behaviour," Economic Journal, Royal Economic Society, vol. 125(589), pages 1790-1817, December.
    5. Qiang Fu & Jingfeng Lu & Yue Pan, 2015. "Team Contests with Multiple Pairwise Battles," American Economic Review, American Economic Association, vol. 105(7), pages 2120-2140, July.
    6. repec:spr:jogath:v:47:y:2018:i:1:d:10.1007_s00182-017-0586-6 is not listed on IDEAS
    7. repec:bla:ecinqu:v:56:y:2018:i:3:p:1464-1485 is not listed on IDEAS
    8. repec:eee:jetheo:v:176:y:2018:i:c:p:372-392 is not listed on IDEAS
    9. Matros, Alexander & Possajennikov, Alex, 2016. "Tullock contests may be revenue superior to auctions in a symmetric setting," Economics Letters, Elsevier, vol. 142(C), pages 74-77.
    10. Ezra Einy & Ori Haimanko & Ram Orzach & Aner Sela, 2016. "Common-value all-pay auctions with asymmetric information and bid caps," International Journal of Game Theory, Springer;Game Theory Society, vol. 45(1), pages 63-88, March.
    11. Kaplan, Todd R. & Zamir, Shmuel, 2015. "Advances in Auctions," Handbook of Game Theory with Economic Applications, Elsevier.
    12. repec:kap:pubcho:v:179:y:2019:i:3:d:10.1007_s11127-018-0624-3 is not listed on IDEAS
    13. repec:eee:jetheo:v:179:y:2019:i:c:p:99-130 is not listed on IDEAS

    More about this item

    Keywords

    Contests; All-pay; Auctions; Asymmetries; Interdependent valuations; Correlated signals;

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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