IDEAS home Printed from https://ideas.repec.org/p/bgu/wpaper/1706.html
   My bibliography  Save this paper

All-Pay Auctions With Asymmetric Effort Constraints

Author

Listed:
  • Chen Cohen

    (Department of Management and Economics, The Open University of Israel, Israel)

  • Ofer Levi

    (Department of Mathematics and Computer Science, The Open University of Israel, Israel)

  • Aner Sela

    (BGU)

Abstract

We study all-pay auctions with discrete strategy sets and analyze the equilibrium strategies when players have asymmetric values of winning as well as asymmetric effort constraints. We prove that for any number of players if one of them has the highest effort constraint then, independent of the players’ values of winning, he is the only player with a positive expected payoff. However, when two players have the same highest effort constraint then they do not necessarily have the highest expected payoffs. By several examples we show a significant distinction between the equilibrium strategies of two players and a larger number of players, particularly when the player with the highest effort constraint is not unique.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Chen Cohen & Ofer Levi & Aner Sela, 2017. "All-Pay Auctions With Asymmetric Effort Constraints," Working Papers 1706, Ben-Gurion University of the Negev, Department of Economics.
    • Handle: RePEc:bgu:wpaper:1706
    as

    Download full text from publisher

    File URL: http://in.bgu.ac.il/en/humsos/Econ/Workingpapers/1706.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Szech, Nora, 2015. "Tie-breaks and bid-caps in all-pay auctions," Games and Economic Behavior, Elsevier, vol. 92(C), pages 138-149.
    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. Dechenaux, Emmanuel & Kovenock, Dan & Lugovskyy, Volodymyr, 2006. "Caps on bidding in all-pay auctions: Comments on the experiments of A. Rapoport and W. Amaldoss," Journal of Economic Behavior & Organization, Elsevier, vol. 61(2), pages 276-283, October.
    4. Che, Yeon-Koo & Gale, Ian L, 1998. "Caps on Political Lobbying," American Economic Review, American Economic Association, vol. 88(3), pages 643-651, June.
    5. Sergiu Hart, 2014. "Allocation Games with Caps: From Captain Lotto to All-Pay Auctions," Discussion Paper Series dp670, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem.
    6. 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.
    7. Arye Hillman & Dov Samet, 1987. "Dissipation of contestable rents by small numbers of contenders," Public Choice, Springer, vol. 54(1), pages 63-82, January.
    8. 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.
    9. Baye, Michael R & Kovenock, Dan & de Vries, Casper G, 1994. "The Solution to the Tullock Rent-Seeking Game When R Is Greater Than 2: Mixed-Strategy Equilibria and Mean Dissipation Rates," Public Choice, Springer, vol. 81(3-4), pages 363-380, December.
    10. Cohen Chen & Sela Aner, 2007. "Contests with Ties," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 7(1), pages 1-18, December.
    11. Maskin, Eric S., 2000. "Auctions, development, and privatization: Efficient auctions with liquidity-constrained buyers," European Economic Review, Elsevier, vol. 44(4-6), pages 667-681, May.
    12. Che, Yeon-Koo & Gale, Ian, 1996. "Expected revenue of all-pay auctions and first-price sealed-bid auctions with budget constraints," Economics Letters, Elsevier, vol. 50(3), pages 373-379, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Aner Sela, 2018. "Reverse Contests," Working Papers 1804, Ben-Gurion University of the Negev, Department of Economics.
    2. He, Simin, 2019. "Minority advantage and disadvantage in competition and coordination," Journal of Economic Behavior & Organization, Elsevier, vol. 163(C), pages 464-482.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. HHironori Otsubo, 2012. "Contests with Incumbency Advantages: An Experiment Investigation of the Effect of Limits on Spending Behavior and Outcome," Jena Economics Research Papers 2012-020, Friedrich-Schiller-University Jena.
    2. Ivan Pastine & Tuvana Pastine, 2023. "Equilibrium existence and expected payoffs in all-pay auctions with constraints," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 75(4), pages 983-1007, May.
    3. Llorente-Saguer, Aniol & Sheremeta, Roman M. & Szech, Nora, 2023. "Designing contests between heterogeneous contestants: An experimental study of tie-breaks and bid-caps in all-pay auctions," European Economic Review, Elsevier, vol. 154(C).
    4. Llorente-Saguer, Aniol & Sheremeta, Roman & Szech, Nora, 2016. "Designing Contests Between Heterogeneous Contestants: An Experimental Study of Tie-Breaks and Bid-Caps in All-Pay Auctions," MPRA Paper 71202, University Library of Munich, Germany.
    5. Lang, Matthias & Seel, Christian & Strack, Philipp, 2014. "Deadlines in stochastic contests," Journal of Mathematical Economics, Elsevier, vol. 52(C), pages 134-142.
    6. Konrad, Kai A., 2007. "Strategy in contests: an introduction [Strategie in Turnieren – eine Einführung]," Discussion Papers, Research Unit: Market Processes and Governance SP II 2007-01, WZB Berlin Social Science Center.
    7. Kaplan, Todd R. & Zamir, Shmuel, 2015. "Advances in Auctions," Handbook of Game Theory with Economic Applications,, Elsevier.
    8. Hirata, Daisuke, 2014. "A model of a two-stage all-pay auction," Mathematical Social Sciences, Elsevier, vol. 68(C), pages 5-13.
    9. Ella Segev & Aner Sela, 2011. "Sequential All-Pay Auctions with Head Starts and Noisy Outputs," Working Papers 1106, Ben-Gurion University of the Negev, Department of Economics.
    10. Sela, Aner & Haimanko, Ori & Orzach, Ram & Einy, Ezra, 2014. "Common-Value All-Pay Auctions with Asymmetric Information and Bid Caps," CEPR Discussion Papers 10173, C.E.P.R. Discussion Papers.
    11. Dechenaux, Emmanuel & Kovenock, Dan & Lugovskyy, Volodymry, 2003. "A Comment on David and Goliath: An Analysis on Asymmetric Mixed-Strategy Games and Experimental Evidence ," Purdue University Economics Working Papers 1162, Purdue University, Department of Economics.
    12. Subhasish M. Chowdhury & Patricia Esteve‐González & Anwesha Mukherjee, 2023. "Heterogeneity, leveling the playing field, and affirmative action in contests," Southern Economic Journal, John Wiley & Sons, vol. 89(3), pages 924-974, January.
    13. Aner Sela, 2018. "Reverse Contests," Working Papers 1804, Ben-Gurion University of the Negev, Department of Economics.
    14. Ella Segev & Aner Sela, 2014. "Sequential all-pay auctions with head starts," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 43(4), pages 893-923, December.
    15. 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.
    16. 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.
    17. Omri Haluta & Aner Sela, 2020. "Effort Maximization In Contests Under A Balance Constraint," Working Papers 2006, Ben-Gurion University of the Negev, Department of Economics.
    18. Alan Gelder & Dan Kovenock & Brian Roberson, 2022. "All-pay auctions with ties," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 74(4), pages 1183-1231, November.
    19. Alcalde, José & Dahm, Matthias, 2010. "Rent seeking and rent dissipation: A neutrality result," Journal of Public Economics, Elsevier, vol. 94(1-2), pages 1-7, February.
    20. Ewerhart, Christian, 2017. "Contests with small noise and the robustness of the all-pay auction," Games and Economic Behavior, Elsevier, vol. 105(C), pages 195-211.

    More about this item

    Keywords

    All-pay auctions; asymmetric effort constraints; asymmetric players; weakly asymmetric players;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:bgu:wpaper:1706. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Aamer Abu-Qarn (email available below). General contact details of provider: https://edirc.repec.org/data/edbguil.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.