Tie-breaks and bid-caps in all-pay auctions

• 成果类型: Article
• 署名作者: Szech, Nora
• 署名单位: Helmholtz Association; Karlsruhe Institute of Technology; Leibniz Association; Ifo Institut
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2015.05.008
• 发表日期: 2015
• 页码: 138-149
• 关键词: All-pay auctions; contests; Bid-caps; Tie-breaking; lobbying

摘要

We revisit the two bidder complete information all-pay auction with bid-caps introduced by Che and Gale (1998), dropping their assumption that tie-breaking must be symmetric. Any choice of tie-breaking rule leads to a different set of Nash equilibria. Compared to the optimal bid-cap of Che and Gale we obtain that in order to maximize the sum of bids, the designer prefers to set a less restrictive bid-cap combined with a tie-breaking rule which slightly favors the weaker bidder. Moreover, the designer is better off breaking ties deterministically in favor of the weak bidder than symmetrically. (C) 2015 Elsevier Inc. All rights reserved.