A Comparison of Multiple-Unit All-Pay and Winner-Pay Auctions Under Incomplete Information

Yasar Barut, Dan Kovenock and Charles Noussair
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Yasar Barut: Rice University, USA

International Economic Review, 2002, vol. 43, issue 3, 675-708

Abstract: This article examines the properties of independent-private-value all-pay and winner-pay auctions when there are multiple units sold. We study bidding behavior, efficiency, and revenue in a set of 23 experimental sessions. Our data show that the all-pay auction and the winner-pay auction are empirically revenue equivalent, though both yield higher revenue than the risk neutral Bayesian equilibrium. Our evidence also suggests that the winner-pay auction is more likely to lead to a Pareto-efficient allocation than the all-pay auction. Copyright Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association

Date: 2002
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Working Paper: A Comparison of Multiple-Unit All-Pay and Winner-Pay Auctions Under Incomplete Information (1999)
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