Tie-breaks and bid-caps in all-pay auctions

B-Tier
Journal: Games and Economic Behavior
Year: 2015
Volume: 92
Issue: C
Pages: 138-149

Authors (1)

Score contribution per author:

2.011 = (α=2.01 / 1 authors) × 1.0x B-tier

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

Abstract

We revisit the two bidder complete information all-pay auction with bid-caps introduced by Che and Gale (1998), dropping their assumption that tie-breaking must be symmetric. Any choice of tie-breaking rule leads to a different set of Nash equilibria. Compared to the optimal bid-cap of Che and Gale we obtain that in order to maximize the sum of bids, the designer prefers to set a less restrictive bid-cap combined with a tie-breaking rule which slightly favors the weaker bidder. Moreover, the designer is better off breaking ties deterministically in favor of the weak bidder than symmetrically.

Technical Details

RePEc Handle
repec:eee:gamebe:v:92:y:2015:i:c:p:138-149
Journal Field
Theory
Author Count
1
Added to Database
2026-01-29