Handicaps in incomplete information all-pay auctions with a diverse set of bidders
Rene Kirkegaard ()
European Economic Review, 2013, vol. 64, issue C, 98-110
In many contests, a subset of contestants is granted preferential treatment which is presumably intended to be advantageous. Examples include affirmative action and biased procurement policies. In this paper, however, I show that some of the supposed beneficiaries may in fact become worse off when the favored group is diverse. The reason is that the other favored contestants become more aggressive, which may outweigh the advantage that is gained over contestants who are handicapped. The contest is modeled as an incomplete-information all-pay auction in which contestants have heterogenous and possibly non-linear cost functions.
Keywords: All-pay auctions; Asymmetric auctions; Contests; Handicaps; Preferential treatment (search for similar items in EconPapers)
JEL-codes: C72 D44 D82 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:64:y:2013:i:c:p:98-110
Access Statistics for this article
European Economic Review is currently edited by T.S. Eicher, A. Imrohoroglu, E. Leeper, J. Oechssler and M. Pesendorfer
More articles in European Economic Review from Elsevier
Bibliographic data for series maintained by Nithya Sathishkumar ().