 Semi-targeted all-pay auctions: A partial exclusion principleInternational Journal of Industrial Organization, 2018, vol. 61, issue C, 256-282 Abstract: This paper studies the effects of a specific affirmative action policy in complete information all-pay auctions when players differ in ability. The contest organizer splits the overall prize of the competition into a targeted and an untargeted prize. The targeted prize is exclusively for disadvantaged (low-ability) agents and excludes advantaged agents partially from the overall prize. We consider a setting with one high-ability and two low-ability contestants and fully characterize equilibrium. Assuming that the contest organizer aims to maximize expected total effort, we show that (i) almost any targeted prize is preferable to a standard all-pay auction without targeted prize; (ii) the exclusion principle Baye et al. (1993) can be implemented by a wide range of sufficiently large targeted prizes; and (iii) partial exclusion by means of an appropriately chosen targeted prize benefits the organizer more than complete exclusion. We also discuss the robustness of our results in settings with more than three agents. Keywords: Asymmetric contests; Multi-prize contests; Affirmative action; Discrimination; Prize structure; Exclusion principle (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:61:y:2018:i:c:p:256-282 DOI: 10.1016/j.ijindorg.2018.09.003 Access Statistics for this article International Journal of Industrial Organization is currently edited by P. Bajari, B. Caillaud and N. Gandal More articles in International Journal of Industrial Organization from Elsevier |
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