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Common-value all-pay auctions with asymmetric information

Author

Listed:
  • Ezra Einy

    (Ben-Gurion University of the Negev)

  • Mridu Prabal Goswami

    (Indian Statistical Institute)

  • Ori Haimanko

    (Ben-Gurion University of the Negev)

  • Ram Orzach

    (Oakland University)

  • Aner Sela

    (Ben-Gurion University of the Negev)

Abstract

We study two-player common-value all-pay auctions in which the players have ex-ante asymmetric information represented by finite connected partitions of the set of states of nature. Our focus is on a family of such auctions in which no player has an information advantage over his opponent. We find sufficient conditions for the existence of equilibrium with monotone strategies, and show that such an equilibrium is unique. We further show that the ex-ante distribution of equilibrium effort is the same for every player (and hence the players’ expected efforts are equal), although their expected payoffs are different and they do not have the same ex-ante probability of winning.

Suggested Citation

  • Ezra Einy & Mridu Prabal Goswami & Ori Haimanko & Ram Orzach & Aner Sela, 2017. "Common-value all-pay auctions with asymmetric information," International Journal of Game Theory, Springer;Game Theory Society, vol. 46(1), pages 79-102, March.
    • Handle: RePEc:spr:jogath:v:46:y:2017:i:1:d:10.1007_s00182-015-0524-4
    DOI: 10.1007/s00182-015-0524-4
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    as
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    Cited by:

    1. Ezra Einy & Ori Haimanko & Diego Moreno & Aner Sela & Benyamin Shitovitz, 2013. "Tullock Contests With Asymmetric Information," Working Papers 1303, Ben-Gurion University of the Negev, Department of Economics.
    2. Wärneryd, Karl, 2013. "Common-value contests with asymmetric information," Economics Letters, Elsevier, vol. 120(3), pages 525-527.
    3. Lu, Jingfeng & Parreiras, Sérgio O., 2017. "Monotone equilibrium of two-bidder all-pay auctions Redux," Games and Economic Behavior, Elsevier, vol. 104(C), pages 78-91.
    4. He, Simin, 2019. "Minority advantage and disadvantage in competition and coordination," Journal of Economic Behavior & Organization, Elsevier, vol. 163(C), pages 464-482.
    5. Chen Cohen & David Lagziel & Ofer Levi & Aner Sela, 2020. "All-Pay Auctions With Heterogeneous Prizes And Partially Asymmetric Players," Working Papers 2010, Ben-Gurion University of the Negev, Department of Economics.
    6. 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.
    7. Cohen, Chen & Lagziel, David & Levi, Ofer & Sela, Aner, 2023. "The role of the second prize in all-pay auctions with two heterogeneous prizes," Journal of Mathematical Economics, Elsevier, vol. 105(C).

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    More about this item

    Keywords

    Common-value all-pay auctions; Asymmetric information;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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