All-Pay Auctions: Implementation and Optimality
This paper analyzes how all-pay auctions with endogenous prizes can be used to provide effort incentives. We show that wide classes of effort distributions can be implemented as equilibrium outcomes of such games. We also ask how all-pay auctions have to be structured so as to induce high expected highest efforts without generating excessive wasteful efforts of losers. All-pay auctions with endogenous prizes can do better than all-pay auctions with fixed prizes in this respect, in particular, when the prize function is approximately linear. We use the results to compare patents and prizes as innovation incentives, and to explore promotion incentives in organizations.
|Date of creation:||Jan 2013|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
|Order Information:|| Email: |
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Moldovanu, Benny & Sela, Aner, 1999.
"The Optimal Allocation of Prizes in Contests,"
Sonderforschungsbereich 504 Publications
99-75, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
- Kaplan, T.R. & Luski, I. & Wettstein, D., 2000.
"Innovative Activity and Sunk Cost,"
0006, Exeter University, Department of Economics.
- Ron Siegel, 2010. "Asymmetric Contests with Conditional Investments," American Economic Review, American Economic Association, vol. 100(5), pages 2230-60, December.
- Dario Sacco & Armin Schmutzler, 2008.
"Competition and Innovation: An Experimental Investigation,"
SOI - Working Papers
0807, Socioeconomic Institute - University of Zurich.
- Donja Darai & Dario Sacco & Armin Schmutzler, 2010. "Competition and innovation: an experimental investigation," Experimental Economics, Springer, vol. 13(4), pages 439-460, December.
- Donja Darai & Dario Sacco & Armin Schmutzler, 2009. "Competition and Innovation: An Experimental Investigation," SOI - Working Papers 0608, Socioeconomic Institute - University of Zurich, revised Apr 2007.
- Cohen, Chen & Kaplan, Todd & Sela, Aner, 2004.
"Optimal Rewards in Contests,"
CEPR Discussion Papers
4704, C.E.P.R. Discussion Papers.
- Konrad, Kai A., 2009. "Strategy and Dynamics in Contests," OUP Catalogue, Oxford University Press, number 9780199549603.
- Michael R. Baye & Dan Kovenock & Casper G. de Vries, 2008.
"Contests with Rank-Order Spillovers,"
2008-20, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
- Baye, Michael R. & Kovenock, Dan & Vries, Casper G. de, 2009. "Contests with rank-order spillovers," Discussion Papers, Research Unit: Market Processes and Governance SP II 2009-09, Social Science Research Center Berlin (WZB).
- Michael R. Baye & Dan Kovenock & Casper G. de Vries, 2009. "Contests with Rank-Order Spillovers," Tinbergen Institute Discussion Papers 09-066/2, Tinbergen Institute.
- Todd Kaplan, 2001.
"All-Pay Auctions with Variable Rewards,"
0109, Exeter University, Department of Economics.
- Skaperdas, S., 1991.
"Cooperation, Conflict And Power In The Absence Of Property Rights,"
90-91-06a, California Irvine - School of Social Sciences.
- Skaperdas, Stergios, 1992. "Cooperation, Conflict, and Power in the Absence of Property Rights," American Economic Review, American Economic Association, vol. 82(4), pages 720-39, September.
- Chung, Tai-Yeong, 1996. " Rent-Seeking Contest When the Prize Increases with Aggregate Efforts," Public Choice, Springer, vol. 87(1-2), pages 55-66, April.
When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:9323. 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: ()The email address of this maintainer does not seem to be valid anymore. Please ask to update the entry or send us the correct address
If references are entirely missing, you can add them using this form.