IDEAS home Printed from https://ideas.repec.org/a/ier/iecrev/v43y2002i3p675-708.html
   My bibliography  Save this article

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

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: http://openurl.ingenta.com/content?genre=article&issn=0020-6598&volume=43&spage=675
    Download Restriction: Free access to full text is restricted to Ingenta subscribers.

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Roger B. Myerson, 1978. "Optimal Auction Design," Discussion Papers 362, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    2. Erwin Amann & Wolfgang Leininger, 1995. "Expected revenue of all-pay and first-price sealed-bid auctions with affiliated signals," Journal of Economics, Springer, vol. 61(3), pages 273-279, October.
    3. Harris, Milton & Raviv, Artur, 1981. "Allocation Mechanisms and the Design of Auctions," Econometrica, Econometric Society, vol. 49(6), pages 1477-1499, November.
    4. Douglas Davis & Robert Reilly, 1998. "Do too many cooks always spoil the stew? An experimental analysis of rent-seeking and the role of a strategic buyer," Public Choice, Springer, vol. 95(1), pages 89-115, April.
    5. Potters, Jan & de Vries, Casper G. & van Winden, Frans, 1998. "An experimental examination of rational rent-seeking," European Journal of Political Economy, Elsevier, vol. 14(4), pages 783-800, November.
    6. Holt, Charles A, Jr & Sherman, Roger, 1982. "Waiting-Line Auctions," Journal of Political Economy, University of Chicago Press, vol. 90(2), pages 280-294, April.
    7. Glazer, Amihai & Hassin, Refael, 1988. "Optimal Contests," Economic Inquiry, Western Economic Association International, vol. 26(1), pages 133-143, January.
    8. 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.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ier:iecrev:v:43:y:2002:i:3:p:675-708. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (). General contact details of provider: http://edirc.repec.org/data/deupaus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.