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Allocation of prizes in asymmetric all-pay auctions

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  • Cohen, Chen
  • Sela, Aner

Abstract

We study asymmetric all-pay auctions with multiple objects where players' values for the objects are common knowledge. The players have different values for the objects but they have the same ranking. The contest designer may award one-prize including all the objects to the player with the highest effort, or, alternatively, he may allocate several prizes, each prize including one object such that the first prize is awarded to the player with the highest effort, the second prize to the player with the second-highest effort, and so on until all the objects are allocated. We analyze the distribution of effort in one-prize and multiple-prize contests and show that allocation of several prizes may be optimal for a contest designer who maximizes the total effort.

Suggested Citation

  • Cohen, Chen & Sela, Aner, 2008. "Allocation of prizes in asymmetric all-pay auctions," European Journal of Political Economy, Elsevier, vol. 24(1), pages 123-132, March.
  • Handle: RePEc:eee:poleco:v:24:y:2008:i:1:p:123-132
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    References listed on IDEAS

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    1. Benny Moldovanu & Aner Sela, 2001. "The Optimal Allocation of Prizes in Contests," American Economic Review, American Economic Association, vol. 91(3), pages 542-558, June.
    2. Arye L. Hillman & John G. Riley, 1989. "Politically Contestable Rents And Transfers," Economics and Politics, Wiley Blackwell, vol. 1(1), pages 17-39, March.
    3. Che, Yeon-Koo & Gale, Ian L, 1998. "Caps on Political Lobbying," American Economic Review, American Economic Association, vol. 88(3), pages 643-651, June.
    4. Barut, Yasar & Kovenock, Dan, 1998. "The symmetric multiple prize all-pay auction with complete information," European Journal of Political Economy, Elsevier, vol. 14(4), pages 627-644, November.
    5. Dan Kovenock & Michael R. Baye & Casper G. de Vries, 1996. "The all-pay auction with complete information (*)," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 8(2), pages 291-305.
    6. Amann, Erwin & Leininger, Wolfgang, 1996. "Asymmetric All-Pay Auctions with Incomplete Information: The Two-Player Case," Games and Economic Behavior, Elsevier, vol. 14(1), pages 1-18, May.
    7. Konrad, Kai A., 2006. "Silent interests and all-pay auctions," International Journal of Industrial Organization, Elsevier, vol. 24(4), pages 701-713, July.
    8. Cohen, Chen & Sela, Aner, 2005. "Manipulations in contests," Economics Letters, Elsevier, vol. 86(1), pages 135-139, January.
    9. Moldovanu, Benny & Sela, Aner, 2006. "Contest architecture," Journal of Economic Theory, Elsevier, vol. 126(1), pages 70-96, January.
    10. Arye Hillman & Dov Samet, 1987. "Dissipation of contestable rents by small numbers of contenders," Public Choice, Springer, vol. 54(1), pages 63-82, January.
    11. Arieh Gavious & Benny Moldovanu & Aner Sela, 2002. "Bid Costs and Endogenous Bid Caps," RAND Journal of Economics, The RAND Corporation, vol. 33(4), pages 709-722, Winter.
    12. Clark, Derek J & Riis, Christian, 1998. "Competition over More Than One Prize," American Economic Review, American Economic Association, vol. 88(1), pages 276-289, March.
    13. Szymanski, Stefan & Valletti, Tommaso, 2004. "First and Second Prizes in Imperfectly Discriminating Contests," CEPR Discussion Papers 4484, C.E.P.R. Discussion Papers.
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    Cited by:

    1. Xiao, Jun, 2016. "Asymmetric all-pay contests with heterogeneous prizes," Journal of Economic Theory, Elsevier, vol. 163(C), pages 178-221.
    2. Kräkel, Matthias, 2012. "Competitive careers as a way to mediocracy," European Journal of Political Economy, Elsevier, vol. 28(1), pages 76-87.
    3. Van Long, Ngo, 2013. "The theory of contests: A unified model and review of the literature," European Journal of Political Economy, Elsevier, vol. 32(C), pages 161-181.
    4. Alex Krumer & Reut Megidish & Aner Sela, 2017. "The Optimal Design Of Round-Robin Tournaments With Three Players," Working Papers 1707, Ben-Gurion University of the Negev, Department of Economics.
    5. repec:spr:etbull:v:2:y:2014:i:1:d:10.1007_s40505-014-0030-z is not listed on IDEAS
    6. Aner Sela, 2008. "Sequential Two-Prize Contests," Working Papers 0803, Ben-Gurion University of the Negev, Department of Economics.
    7. Sela, Aner, 2008. "Sequential Two-Prize Contests," CEPR Discussion Papers 6769, C.E.P.R. Discussion Papers.
    8. Ghazala Azmat & Marc Möller, 2012. "The Distribution of Talent across Contests," Working Papers 600, Barcelona Graduate School of Economics.
    9. Ghazala Azmat & Marc Möller, 2016. "The Distribution of Talent across Contests Feedback in Higher Education," Working Papers 789, Queen Mary University of London, School of Economics and Finance.
    10. Matthias Dahm, 2017. "All-Pay Auctions with Extra Prize: A Partial Exclusion Principle," Discussion Papers 2017-01, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    11. Matros, Alexander, 2012. "Sad-Loser contests," Journal of Mathematical Economics, Elsevier, vol. 48(3), pages 155-162.
    12. repec:eee:mateco:v:74:y:2018:i:c:p:21-34 is not listed on IDEAS
    13. Ghazala Azmat & Marc Möller, 2016. "The Distribution of Talent across Contests," Working Papers 789, Queen Mary University of London, School of Economics and Finance.
    14. Ryvkin, Dmitry, 2010. "Contests with private costs: Beyond two players," European Journal of Political Economy, Elsevier, vol. 26(4), pages 558-567, December.
    15. repec:elg:eechap:15325_3 is not listed on IDEAS

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