On the Continuous Equilibria of Affiliated-Value, All-Pay Auctions with Private Budget Constraints, Third 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.
|Date of creation:||23 Apr 2012|
|Date of revision:||10 Jan 2014|
|Contact details of provider:|| Postal: |
Web page: http://economics.sas.upenn.edu/pier
More information through EDIRC
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,"
6102, University Library of Munich, Germany.
- 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.
- Yeon-Koo Che & Ian Gale, 2005. "Revenue comparisons for auctions when bidders have arbitrary types," Discussion Papers 0506-03, Columbia University, Department of Economics.
- Fang, Hanming & Parreiras, Sergio O., 2002. "Equilibrium of Affiliated Value Second Price Auctions with Financially Constrained Bidders: The Two-Bidder Case," Games and Economic Behavior, Elsevier, vol. 39(2), pages 215-236, May.
- Che, Yeon-Koo & Gale, Ian, 1998. "Standard Auctions with Financially Constrained Bidders," Review of Economic Studies, Wiley Blackwell, vol. 65(1), pages 1-21, January.
When requesting a correction, please mention this item's handle: RePEc:pen:papers:14-001. 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: (Dolly Guarini)
If references are entirely missing, you can add them using this form.