A note on the Exclusion Principle

Bertoletti, Paolo (2006): A note on the Exclusion Principle. Unpublished.

Abstract

According to the so-called Exclusion Principle (introduced by Baye et alii, 1993), it might be profitable for the seller to reduce the number of fully-informed potential bidders in an all-pay auction. We show that it does not apply if the seller regards the bidders’ private valuations as belonging to the class of identical and independent distributions with a monotonic hazard rate.

• Item Type: MPRA Paper
• Additional Information: A previous version of this work can be found in Quaderni del Dipartimento di economia politica e metodi quantitativi, #179 (12-05), Pavia, Dipartimento di economia politica e metodi quantitativi, 2003, <http://economia.unipv.it/eco-pol/quaderni.htm>
• Institution: Dipartimento di Economia Politica e Metodi quantitativi, University of Pavia
• Language: English
• Keywords: all-pay auctions; Exclusion Principle; monotonic hazard rate; economic theory of lobbying
• Subjects: D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information; D - Microeconomics > D4 - Market Structure and Pricing > D44 - Auctions; D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Economic Models of Political Processes: Rent-Seeking, Elections, Legislatures, and Voting Behavior

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