Common-Value All-Pay Auctions with Asymmetric Information

Aner Sela, Ori Haimanko (), Ram Orzach and Ezra Einy

No 9315, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We study two-player common-value all-pay auctions (contests) with asymmetric information under the assumption that one of the players has an information advantage over his opponent. We characterize the unique equilibrium in these contests, and examine the role of information in determining the players' expected efforts, probabilities of winning, and expected payoffs. In particular, we show that the players always have the same probability of winning the contest, and that their expected efforts are the same, but their expected payoffs are different. It is also shown that budget constraints may have an unanticipated effect on the players' expected payoffs, i.e., a player's information advantage may turn into a payoff disadvantage.

Keywords: All-pay auctions; Asymmetric information; Information advantage (search for similar items in EconPapers)
JEL-codes: C72 D44 D82 (search for similar items in EconPapers)
Date: 2013-01
New Economics Papers: this item is included in nep-cta, nep-gth and nep-mic
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Citations: View citations in EconPapers (6)

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Related works:
Journal Article: Common-value all-pay auctions with asymmetric information (2017)
Working Paper: COMMON-VALUE ALL-PAY AUCTIONS WITH ASYMMETRIC INFORMATION (2013)
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