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Non-monotoniticies and the all-pay auction tie-breaking rule

  • Aloisio Araujo


  • Luciano Castro


  • Humberto Moreira


Discontinuous games, such as auctions, may require special tie-breaking rules to guarantee equilibrium existence. The best results available ensure equilibrium existence only in mixed strategy with endogenously defined tie-breaking rules and communication of private information. We show that an all-pay auction tie-breaking rule is sufficient for the existence of pure strategy equilibrium in a class of auctions. The rule is explicitly defined and does not require communication of private information. We also characterize when special tie-breaking rules are really needed.

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Article provided by Springer & Society for the Advancement of Economic Theory (SAET) in its journal Economic Theory.

Volume (Year): 35 (2008)
Issue (Month): 3 (June)
Pages: 407-440

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Handle: RePEc:spr:joecth:v:35:y:2008:i:3:p:407-440
DOI: 10.1007/s00199-007-0249-0
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  1. Araujo, Aloisio & Moreira, Humberto, 2010. "Adverse selection problems without the Spence-Mirrlees condition," Journal of Economic Theory, Elsevier, vol. 145(3), pages 1113-1141, May.
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  6. Castro, Luciano I. de & Araujo, Aloisio, 2006. "Pure strategy equilibria of single and double auctions with interdependent values," UC3M Working papers. Economics we065320, Universidad Carlos III de Madrid. Departamento de Economía.
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