Bos, Olivier (2011): Wars of attrition and all-pay auctions with stochastic competition.
Download (467kB) | Preview
We extend the war of attrition and all-pay auction analysis of Krishna and Morgan (1997) to a stochastic competition setting. We determine the existence of equilibrium bidding strategies and discuss the potential shape of these strategies. Results for the war of attrition contrast with the characterization of the bidding equilibrium strategies in the first-price all-pay auction as well as the winner-pay auctions. Furthermore we investigate the expected revenue comparisons among the war of attrition, the all-pay auction and the winner-pay auctions and discuss the Linkage Principle as well. Our findings are applicable to future works on contests and charity auctions.
|Item Type:||MPRA Paper|
|Original Title:||Wars of attrition and all-pay auctions with stochastic competition|
|Keywords:||All-pay auction, war of attrition, number of bidders|
|Subjects:||D - Microeconomics > D4 - Market Structure, Pricing, and Design > D44 - Auctions
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information ; Mechanism Design
|Depositing User:||Olivier Bos|
|Date Deposited:||18 Nov 2011 00:42|
|Last Modified:||19 Feb 2016 16:56|
Goeree, J. K., E. Maasland, S. Onderstal, and J. L. Turner (2005): “How (not) to raise money for charity,” Journal of Political Economy, 113(4), 897–918.
Harstad, R., J. Kagel, and D. Levin (1990): “Equilibrium bid functions for auctions with an uncertain number of bidders,” Economics Letters, 33, 35–44.
Harstad, R., A. Pekec, and I. Tsetlin (2008): “Information Aggregation in Auctions with an Unknown Number of Bidders,” Games and Economic Behavior, 62, 476–508.
Krishna, V. (2002): Auction Theory. Academic Press.
Krishna, V., and J. Morgan (1997): “An Analysis of the War of Attrition and the All-Pay Auction,” Journal of Economic Theory, 72, 343–362.
Matthews, S. (1987): “Comparing Auctions for Risk Averse Buyers: A Buyer’s Point of View,” Econometrica, 55, 633–646.
McAfee, P., and J. McMillan (1987): “Auctions with a stochastic number of bidders,” Journal of Economic Theory, 43, 1–19.
Milgrom, P., and R. Weber (1982): “A Theory of Auctions and Competitive Bidding,” Econometrica, 50, 1089–1122.
Pekec, A., and I. Tsetlin (2008): “Revenue Ranking of Discriminatory and Uniform Auctions with an Unknown Number of Bidders,” Management Science, 54, 1610–1623.