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All-pay auctions with endogenous bid timing: an experimental study

Tracy Liu ()

International Journal of Game Theory, 2018, vol. 47, issue 1, 247-271

Abstract: Abstract Using a controlled laboratory experiment, we examine individuals’ bid timing decisions in complete information all-pay auctions and find that homogeneous bidders are more likely to enter the early bidding stage under a favor-early tie-breaking rule. Furthermore, revenue in an endogenous-entry treatment, in which both sequential and simultaneous all-pay auctions exist, is either lower than or equal to that in an exogenous-entry treatment with only simultaneous all-pay auctions. Additionally, in simultaneous all-pay auctions, individuals do not always employ a mixed strategy as predicted by the risk-neutral model. Instead, our data is better rationalized by a risk- and loss-aversion model.

Keywords: All-pay auction; Bid timing; Experiment; Mixed-strategy Nash equilibrium; C7; C91 (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:spr:jogath:v:47:y:2018:i:1:d:10.1007_s00182-017-0586-6