A note on the Exclusion Principle
Paolo Bertoletti ()
Journal of Mathematical Economics, 2008, vol. 44, issue 11, 1215-1218
The Exclusion Principle [Baye, M.R., Kovenock, D., de Vries, C.G., 1993. Rigging the lobbying process: an application of the all-pay auction. American Economic Review 83, 289-294] asserts that, in an all-pay auction with fully informed participants, it might be profitable for the seller to exclude those bidders whose valuations are the largest. Menicucci [Menicucci, D., 2006. Banning bidders from all-pay auctions. Economic Theory 29, 89-94] shows that banning (ex ante symmetric) bidders can raise expected revenue also in a setting in which the seller regards valuations as identically and independently distributed. We prove that the latter occurrence cannot arise if valuations are distributed according to a monotonic hazard rate.
Keywords: All-pay; auctions; Exclusion; Principle; Monotonic; hazard; rate; Economic; theory; of; lobbying (search for similar items in EconPapers)
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Working Paper: A note on the Exclusion Principle (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:mateco:v:44:y:2008:i:11:p:1215-1218
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