The Value of Information in Asymmetric All-Pay Auctions

Christian Seel

VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order from Verein für Socialpolitik / German Economic Association

Abstract: This paper 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 over head starts. In equilibrium, the stronger player generates an informational rent if and only if his head start distribution is not stochastically dominated by a uniform distribution. This result introduces a new perspective on lobbying contests and procurement contests.

JEL-codes: C72 C73 D72 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-cta, nep-gth and nep-mic
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: The value of information in asymmetric all-pay auctions (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc13:79930

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