The value of information in asymmetric all-pay auctions

C. Seel*

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

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Abstract

This note analyzes a two-player all-pay auction with incomplete information. More precisely, one bidder is uncertain about the size of the initial advantage of his rival modeled as a head start in the auction.

I derive the unique Bayesian Nash equilibrium outcome for a large class of cumulative distribution functions of the head start. The stronger player generates an informational rent if and only if his head start distribution is not stochastically dominated by a uniform distribution. I identify why my results for an uncertain head start differ qualitatively from uncertainty about a cost function or a valuation.
Original languageEnglish
Pages (from-to)330-338
Number of pages9
JournalGames and Economic Behavior
Volume86
DOIs
Publication statusPublished - Jul 2014

Keywords

  • All-pay contests
  • Head start
  • Asymmetric information
  • INCOMPLETE INFORMATION
  • CONTESTS

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