All-Pay Auctions with Polynomial Rewards

Olivier Bos and Martin Ranger

Annals of Economics and Statistics, 2014, issue 115-116, 361-377

Abstract: This paper examines a perfectly discriminating contest (all-pay auction) with two asymmetric players. We focus on unordered valuations. Valuations are endogenous (polynomial functions) and depend on the effort each player invests in the contest. The shape of the valuation function is common knowledge and differs between the contestants. Some key properties of R&D races, lobbying activity and sport contests are captured by this framework. After analyzing the unique mixed strategy equilibrium, we derive a closed form of the expected expenditure of both players. We characterize the expected expenditure by means of incomplete Beta functions.

Date: 2014
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http://www.jstor.org/stable/10.15609/annaeconstat2009.115-116.361 (text/html)

Related works:
Working Paper: All-Pay Auctions with Polynomial Rewards (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:adr:anecst:y:2014:i:115-116:p:361-377

DOI: 10.15609/annaeconstat2009.115-116.361

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