Kotowski, Maciej and Li, Fei (2011): On the continuous equilibria of affiliated-value, all-pay auctions with private budget constraints.
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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 and we investigate its properties. 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. An example shows that with both interdependent valuations and private budget constraints, a revenue ranking between the two mechanisms is generally not possible.
|Item Type:||MPRA Paper|
|Original Title:||On the continuous equilibria of affiliated-value, all-pay auctions with private budget constraints|
|English Title:||On the Continuous Equilibria of Affiliated-Value, All-Pay Auctions with Private Budget Constraints|
|Keywords:||All-Pay Auction, Budget Constraints, Lobbying, War of Attrition, Common Values, Private Values|
|Subjects:||D - Microeconomics > D4 - Market Structure and Pricing > D44 - Auctions|
|Depositing User:||Fei Li|
|Date Deposited:||15. Jan 2012 21:18|
|Last Modified:||15. Feb 2013 21:13|
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All-Pay Auctions with Budget Constraints. (deposited 24. Apr 2011 13:01)
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