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All-pay auctions with private signals about opponents’ values

Zhuoqiong Chen ()
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Zhuoqiong Chen: Harbin Institute of Technology, Shenzhen

Review of Economic Design, 2021, vol. 25, issue 1, No 2, 33-64

Abstract: Abstract We study all-pay auctions where each player observes her private value as well as a noisy private signal about the opponent’s value, following Fang and Morris’s (J Econ Theory 126(1):1–30, 2006) analysis of winner-pay auctions with multidimensional private signals. A unique symmetric monotonic equilibrium exists if the signal is not informative enough. When the signal is sufficiently informative, there exists a symmetric non-monotonic equilibrium in which all types of players randomize in overlapping supports. The revenue is lower than that in the standard independent private value setting. Fixing the signal’s informativeness, the all-pay auction raises lower revenue than the second-price auction, whereas the revenue ranking between the all-pay and the first-price auction is ambiguous.

Keywords: All-pay auction; First-price auction; Second-price auction; Revenue ranking; Multidimensional signals; Private signals (search for similar items in EconPapers)
JEL-codes: D44 D74 D82 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/s10058-020-00242-3

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