Jump Bidding and Budget Constraints in All-Pay Auctions and Wars of Attrition
We study all-pay auctions (or wars of attrition), where the highest bidder wins an object, but all bidders pay their bids. We consider such auctions when two bidders alternate in raising their bids and where all aspects of the auction are common knowledge including bidders' valuations. We analyze how the ability to "jump-bid," or raise bids by more than the minimal necessary increment affects the outcome of the auction. We also study the impact of budget caps on total bids. We show that both of these features, which are common in practice but absent from the previous literature, matter signi cantly in determining the outcome of the auctions.
|Date of creation:||Nov 2007|
|Contact details of provider:|| Postal: Center for Mathematical Studies in Economics and Management Science, Northwestern University, 580 Jacobs Center, 2001 Sheridan Road, Evanston, IL 60208-2014|
Web page: http://www.kellogg.northwestern.edu/research/math/
More information through EDIRC
|Order Information:|| Email: |
When requesting a correction, please mention this item's handle: RePEc:nwu:cmsems:1454. 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: (Fran Walker)
If references are entirely missing, you can add them using this form.