A note on the Exclusion Principle

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

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
• 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 ; Mechanism Design; D - Microeconomics > D4 - Market Structure, Pricing, and Design > D44 - Auctions; D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behavior

References

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