Disclosure Policies in All-pay Auctions with Affiliation

Bo Chen, Marco Serena and Zijia Wang

Working Papers from Max Planck Institute for Tax Law and Public Finance

Abstract: We study all-pay auctions with private and affiliated binary values. To increase revenue (i.e., expected aggregate bid), the auction organizer can commit ex ante to fully disclosing or concealing bidders’ valuations. We find that full disclosure, as opposed to full concealment, always increases bidders’ expected payoffs. If affiliation in bidders’ valuations is low, full disclosure lowers ex ante expected revenue. If affiliation is high: 1) with two bidders, full disclosure lowers expected revenue, and 2) with many bidders, it tends to increase expected revenue. When the low valuation is zero, the auction becomes one with stochastic but affiliated participation, and information disclosure affects neither bidders’ payoffs nor the expected revenue.

Keywords: All-pay auction; Affiliation; Stochastic participation; Disclosure policies (search for similar items in EconPapers)
JEL-codes: C72 D44 D82 (search for similar items in EconPapers)
Pages: 19
Date: 2023-03-03
New Economics Papers: this item is included in nep-des and nep-mic
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