All-Pay Auctions with Ties

Alan Gelder (), Dan Kovenock and Brian Roberson ()
Additional contact information
Alan Gelder: Institute for Defense Analyses
Brian Roberson: Department of Economics, Purdue University

Working Papers from Chapman University, Economic Science Institute

Abstract: We study the two-player, complete information all-pay auction in which a tie ensues if neither player outbids the other by more than a given amount. In the event of a tie, each player receives an identical fraction of the winning prize. Thus players engage in two margins of competition: losing versus tying, and tying versus winning. Two pertinent parameters are the margin required for victory and the value of tying relative to winning. We fully characterize the set of Nash equilibria for the entire parameter space. For much of the parameter space, there is a unique Nash equilibrium which is also symmetric. Equilibria typically involve randomizing over multiple disjoint intervals, so that in essence players randomize between attempting to tie and attempting to win. In equilibrium, expected bids and payoffs are non-monotonic in both the margin required for victory and the relative value of tying.

Keywords: All-pay auction; contest; tie; draws; bid differential (search for similar items in EconPapers)
JEL-codes: C72 D44 D72 D74 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-gth and nep-mic
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://www.chapman.edu/research-and-institutions/e ... s-with-Ties-2016.pdf

Related works:
Journal Article: All-pay auctions with ties (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:chu:wpaper:16-31

Access Statistics for this paper

More papers in Working Papers from Chapman University, Economic Science Institute Contact information at EDIRC.
Bibliographic data for series maintained by Megan Luetje ().