The best-shot all-pay (group) auction with complete information

B-Tier
Journal: Economic Theory
Year: 2014
Volume: 57
Issue: 3
Pages: 603-640

Score contribution per author:

0.670 = (α=2.01 / 3 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We analyze an all-pay group contest in which individual members’ efforts are aggregated via the best-shot technology and the prize is a public good for the winning group. The interplay of within-group free-riding and across-group competition allows for a wide variety of equilibria, according to how well groups overcome internal free-riding. In contrast with the existing literature, we derive equilibria of a symmetric model in which multiple agents per group are active. Our findings differ qualitatively from those of the individualistic all-pay auction: rents are not necessarily dissipated in equilibrium, total expected efforts vary across equilibria, and participation is expected to be greater. Moreover, equilibria with greater symmetry of behavior within a group are shown to have more “wasted” effort but also greater payoffs as overall efforts are lower. In contrast to standard economic intuition, free-riding can be beneficial for players as it reduces competition among groups. Examples of asymmetric group contests are also studied. Copyright Springer-Verlag Berlin Heidelberg 2014

Technical Details

RePEc Handle
repec:spr:joecth:v:57:y:2014:i:3:p:603-640
Journal Field
Theory
Author Count
3
Added to Database
2026-01-24