Jump bidding in the war of attrition

Wei Bi and Huiyun Ding

Mathematical Social Sciences, 2025, vol. 136, issue C

Abstract: This paper studies jump bidding in a war of attrition, where a bidder makes a costly preemptive commitment to deter opponents. We identify a Double-Edged Sword Effect: while jump bidding increases early-stage costs for the jump bidder, it enhances her ability to deter high-valuation opponents in later stages. The bidder jump bids when she believes that her opponent is likely to have a high valuation and not quit soon, such as when the valuation distribution is convex or bounded away from zero. Although jump bidding may result in inefficient allocation, it reduces total attrition costs and can improve overall welfare ex ante.

Keywords: Jump bidding; War of attrition; Double-Edged Sword Effect (search for similar items in EconPapers)
JEL-codes: C72 D44 D47 D82 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165489625000472
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:matsoc:v:136:y:2025:i:c:s0165489625000472

DOI: 10.1016/j.mathsocsci.2025.102432

Access Statistics for this article

Mathematical Social Sciences is currently edited by J.-F. Laslier

More articles in Mathematical Social Sciences from Elsevier
Bibliographic data for series maintained by Catherine Liu ().