Wars of Attrition with Stochastic Competition
We extend the all-pay auctions analysis of Krishna and Morgan (1997) to a stochastic competition setting. In the war of attrition it does not directly follow from the first order condition that the bidding equilibrium strategy is a weighted average of the bidding equilibrium strategies that would be chosen for each number of bidders. This result contrasts with the characterization of the bidding equilibrium strategies in the first-price all-pay auction as well as the winner-pay auctions. Our findings are applicable to future works on contests and charity auctions.
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- Jacob K. Goeree & Emiel Maasland & Sander Onderstal & John L. Turner, 2005. "How (Not) to Raise Money," Journal of Political Economy, University of Chicago Press, vol. 113(4), pages 897-926, August.
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"Information Aggregation in Auctions with an Unknown Number of Bidders,"
0605, Department of Economics, University of Missouri.
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"An Analysis of the War of Attrition and the All-Pay Auction,"
Journal of Economic Theory,
Elsevier, vol. 72(2), pages 343-362, February.
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