Sequential elimination in multi-stage all-pay auctions

Matthew J. Robertson

Economics Letters, 2024, vol. 241, issue C

Abstract: I study a multi-stage all-pay auction in which the lowest bidder in each stage is eliminated. Elimination continues until only two bidders remain, one of whom wins the auction. I analyse optimal bidding behaviour and the seller’s expected revenue when bidders have independent and private values. In contrast to typical bidding strategies, the optimal bid in each stage is strictly decreasing in the number of bidders. For a fixed number of bidders, however, bids increase as bidders progress through the stages of the auction. Despite independent values, this multi-stage auction yields less expected revenue to the seller than its single-stage counterpart when there are more than three bidders.

Keywords: All-pay auctions; Elimination stages; Expected revenue; Bidding strategies (search for similar items in EconPapers)
JEL-codes: D44 D72 D82 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165176524003112
Full text for ScienceDirect subscribers only

Related works:
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:eee:ecolet:v:241:y:2024:i:c:s0165176524003112

DOI: 10.1016/j.econlet.2024.111827

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().