Bertoletti, Paolo (2006): A note on the Exclusion Principle.
Download (62Kb) | Preview
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|
|Institution:||Dipartimento di Economia Politica e Metodi quantitativi, University of Pavia|
|Original Title:||A note on the Exclusion Principle|
|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; Mechanism Design
D - Microeconomics > D4 - Market Structure and Pricing > D44 - Auctions
D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behavior
|Depositing User:||Paolo Bertoletti|
|Date Deposited:||07. Dec 2006|
|Last Modified:||24. Feb 2013 10:47|
Baye, M. R., Kovenock, D. and de Vries, C. G. (1993) Rigging the lobbying process: An application of the all-pay auction, American Economic Review, 83, 289-94.
Baye, M. R., Kovenock, D. and de Vries, C. G. (1996) The all-pay auction with complete information, Economic Theory, 8, 291-305.
Bertoletti, P. (2005) On the reserve price in all-pay auctions with complete information and lobbying games, Pavia: mimeo; available at the website <http://economia.unipv.it/bertoletti/papers/lobby.pdf>.
Che, Y. K. and Gale, I. (1998) Caps on political lobbying, American Economic Review, 88, 643-51.
Hillman, A. L. and Riley, J. G. (1989) Politically contestable rents and transfers, Economics and Politics, 1, 17-39.
Klemperer, P. (2004) Auctions: Theory and Practice, Princeton: Princeton University Press.
Krishna, V. (2002) Auction Theory, San Diego: Academic Press.
Menicucci, D. (2005) Banning bidders from all-pay auctions, Economic Theory, forthcoming.
Moldovanu, B. and Sela, A. (2001) The optimal allocation of prizes in contests, American Economic Review, 91, 542-58.
Shaked, M. and Shanthikumar, J. G. (1994) Stochastic Orders and Their Applications, San Diego: Academic Press.