All-pay auctions with variable rewards

Todd Kaplan; Israel Luski; Aner Sela; David Wettstein

doi:10.1111/1467-6451.00184

All-pay auctions with variable rewards

Todd Kaplan
, Israel Luski
, Aner Sela
, David Wettstein

Department of Economics

Research output: Contribution to journal › Article › peer-review

49 Scopus citations

Abstract

We study all-pay auctions with variable rewards under incomplete information. In standard models, a reward depends on a bidder's privately known type; however, in our model it is also a function of his bid. We show that in such models there is a potential for paradoxical behavior where a reduction in the rewards or an increase in costs may increase the expected sum of bids or alternatively the expected highest bid.

Original language	English
Pages (from-to)	417-430
Number of pages	14
Journal	Journal of Industrial Economics
Volume	50
Issue number	4
DOIs	https://doi.org/10.1111/1467-6451.00184
State	Published - 1 Jan 2002

ASJC Scopus subject areas

Accounting
General Business, Management and Accounting
Economics and Econometrics

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10.1111/1467-6451.00184

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abstract = "We study all-pay auctions with variable rewards under incomplete information. In standard models, a reward depends on a bidder's privately known type; however, in our model it is also a function of his bid. We show that in such models there is a potential for paradoxical behavior where a reduction in the rewards or an increase in costs may increase the expected sum of bids or alternatively the expected highest bid.",

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AB - We study all-pay auctions with variable rewards under incomplete information. In standard models, a reward depends on a bidder's privately known type; however, in our model it is also a function of his bid. We show that in such models there is a potential for paradoxical behavior where a reduction in the rewards or an increase in costs may increase the expected sum of bids or alternatively the expected highest bid.

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All-pay auctions with variable rewards

Abstract

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