All–Pay Auctions with Variable Rewards | Zendy

Kaplan Todd | Zendy; Luski Israel | Zendy; Sela Aner | Zendy; Wettstein David | Zendy

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All–Pay Auctions with Variable Rewards

Author(s) -

Kaplan Todd,

Luski Israel,

Sela Aner,

Wettstein David

Publication year - 2002

Publication title -

the journal of industrial economics

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.93

H-Index - 77

eISSN - 1467-6451

pISSN - 0022-1821

DOI - 10.1111/1467-6451.00184

Subject(s) - common value auction , variable (mathematics) , microeconomics , unique bid auction , economics , function (biology) , econometrics , mathematics , auction theory , mathematical analysis , evolutionary biology , biology

We study all–pay auctions with variable rewards under incomplete information. In standard models, a reward depends on a bidder’s privately known type; however, in our model it is also a function of his bid. We show that in such models there is a potential for paradoxical behavior where a reduction in the rewards or an increase in costs may increase the expected sum of bids or alternatively the expected highest bid.

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