Contests with small noise and the robustness of the all-pay auction

B-Tier
Journal: Games and Economic Behavior
Year: 2017
Volume: 105
Issue: C
Pages: 195-211

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

This paper considers all-pay contests in which the relationship between bids and allocations reflects a small amount of noise. Prior work had focused on one particular equilibrium. However, there may be other equilibria. To address this issue, we introduce a new and intuitive measure for the proximity to the all-pay auction. This allows, in particular, to provide simple conditions under which actually any equilibrium of the contest is both payoff equivalent and revenue equivalent to the unique equilibrium of the corresponding all-pay auction. The results are shown to have powerful implications for monopoly licensing, political lobbying, electoral competition, optimally biased contests, the empirical analysis of rent-seeking, and dynamic contests.

Technical Details

RePEc Handle
repec:eee:gamebe:v:105:y:2017:i:c:p:195-211
Journal Field
Theory
Author Count
1
Added to Database
2026-01-25