On the Continuous Equilibria of Affiliated-Value, All-Pay Auctions with Private Budget Constraints, Second Version
We consider all-pay auctions in the presence of interdependent, affiliated valuations and private budget constraints. For the sealed-bid, all-pay auction we characterize a symmetric equilibrium in continuous strategies for the case of N bidders. Budget constraints encourage more aggressive bidding among participants with large endowments and intermediate valuations. We extend our results to the war of attrition where we show that budget constraints lead to a uniform amplification of equilibrium bids among bidders with sufficient endowments. An example shows that with both interdependent valuations and private budget constraints, a revenue ranking between the two auction formats is generally not possible. Equilibria with discontinuous bidding strategies are discussed.
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| Length: | 59 pages |
| Date of creation: | 23 Apr 2012 |
| Date of revision: | 05 Aug 2013 |
| Handle: | RePEc:pen:papers:13-043 |
| Contact details of provider: | Postal: 3718 Locust Walk, Philadelphia, PA 19104 Phone: 215-898-9992 Fax: 215-573-2378 Web page: http://economics.sas.upenn.edu/pier Email: More information through EDIRC
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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.:
- Che, Yeon-Koo & Gale, Ian, 2006.
"Revenue comparisons for auctions when bidders have arbitrary types,"
Theoretical Economics,
Econometric Society, vol. 1(1), pages 95-118, March.
- Yeon-Koo Che & Ian Gale, 2005. "Revenue Comparisons for Auctions when Bidders Have Arbitrary Types," NajEcon Working Paper Reviews 784828000000000012, www.najecon.org.
- Che, Yeon-Koo & Gale, Ian, 2006. "Revenue Comparisons for Auctions When Bidders Have Arbitrary Types," MPRA Paper 6102, University Library of Munich, Germany.
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