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A Class of All-pay Auctions with Affiliated Information

Published online by Cambridge University Press:  17 August 2016

Gian Luigi Albano
Gian Luigi Albano*
Affiliation:
University CollegeLondon
*
Department of Economics, University College London, Gower Street, London WC1E 6BT, United Kingdom. E-mail: g.albano@ucl.ac.uk
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Summary

We study an auction mechanism combining the war of attrition and the all-pay auction under the assumption that buyers’ signals are affiliated. We provide a sufficient condition which guarantees the existence of a symmetric, increasing equilibrium bidding strategy, but rules out full extraction of buyers’ surplus by the seller. We develop revenue comparison between the combined mechanism, the war of attrition and the all-pay auction.

Résumé

Résumé

Les enchères all-pay constituent des mécanismes de vente dans lesquels le vendeur retient les offres de tous les participants. Nous étudions une classe d’enchères all-pay ou l’acquéreur paie une combinaison convexe entre son offre et la deuxième meilleure offre. Une condition suffisante pour l’existence d’un équilibre symétrique est proposée. Nous montrons sous quelles conditions le vendeur peut extraire tout le surplus des participants.

Keywords

All-pay auctionsWar of AttritionAffiliated valuesD44D82D44D82
Type
Research Article
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 67 , Issue 1 , 2001 , pp. 31 - 38
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 2001 

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Footnotes

*

I am grateful to A. Lizzeri for having brought this problem to my attention. M. Ottaviani and especially two anonymous referees provided insightful comments. All remaining imprecisions are mine.

References

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