Bid caps in large contests

• 成果类型: Article
• 署名作者: Olszewski, Wojciech; Siegel, Ron
• 署名单位: Northwestern University; Pennsylvania Commonwealth System of Higher Education (PCSHE); Pennsylvania State University; Pennsylvania State University - University Park
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2019.02.012
• 发表日期: 2019
• 页码: 101-112
• 关键词: Contests; All-pay auctions; Large contests; Bid caps

摘要

We study the effect of rigid and flexible bid caps on contestants' aggregate costs and aggregate bids in all-pay contests with a large number of heterogeneous contestants and prizes. We show that rigid caps always decrease aggregate costs, whereas flexible caps have essentially no effect on aggregate costs. Rigid caps decrease aggregate bids when costs are linear or concave, but increase aggregate bids under some conditions when costs are convex. Flexible caps always decrease aggregate bids. (C) 2019 Elsevier Inc. All rights reserved.