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A Comparison of Multiple-Unit All-Pay and Winner-Pay Auctions Under Incomplete Information

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  • Yasar Barut

    (Rice University, USA)

  • Dan Kovenock

    (Purdue University, USA)

  • Charles N. Noussair

    (Purdue University, USA)

Abstract

This article examines the properties of independent-private-value all-pay and winner-pay auctions when there are multiple units sold. We study bidding behavior, efficiency, and revenue in a set of 23 experimental sessions. Our data show that the all-pay auction and the winner-pay auction are empirically revenue equivalent, though both yield higher revenue than the risk neutral Bayesian equilibrium. Our evidence also suggests that the winner-pay auction is more likely to lead to a Pareto-efficient allocation than the all-pay auction. Copyright Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association

Suggested Citation

  • Yasar Barut & Dan Kovenock & Charles N. Noussair, 2002. "A Comparison of Multiple-Unit All-Pay and Winner-Pay Auctions Under Incomplete Information," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(3), pages 675-708, August.
    • Handle: RePEc:ier:iecrev:v:43:y:2002:i:3:p:675-708
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