On the reserve price in all-pay auctions with complete information and lobbying games
Paolo Bertoletti ()
MPRA Paper from University Library of Munich, Germany
We show that the seller’s optimal reserve price in an all-pay auction with complete information is higher than in a standard auction. We use our results to re-consider some findings of the literature that models lobbying games as all-pay auctions. In particular, we show that the so-called Exclusion Principle appears to rely crucially on the implicit assumption of a “weak” (in terms of bargaining power) seller, and does not hold if she regards bidders’ valuations as iid according to a monotonic hazard rate. Our preliminary results for the case of independent but asymmetric bidders make it even more suspicious.
Keywords: all-pay auctions; reserve price; economic theory of lobbying (search for similar items in EconPapers)
JEL-codes: D44 D72 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:1083
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