Large all-pay auctions with IPV bidders

Pauli Murto; Juuso Välimäki

doi:10.1016/j.jet.2017.03.008

Large all-pay auctions with IPV bidders

Pauli Murto^*, Juuso Välimäki

^*Corresponding author for this work

Department of Economics

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Abstract

This note analyzes different types of all-pay auctions when the number of bidders becomes large. We compute the distributions of the highest bids for the first-price all pay auction and we show that the expected payment made by the winning bidder converges to half of the total payments. In the second-price all-pay auction (the war of attrition), the highest bid amounts to about 35.5% of the total revenues. We also compute the payments for all-pay auctions with multiple prizes.

Original language	English
Pages (from-to)	629-640
Number of pages	12
Journal	Journal of Economic Theory
Volume	169
DOIs	https://doi.org/10.1016/j.jet.2017.03.008
Publication status	Published - 1 May 2017
MoE publication type	A1 Journal article-refereed

Keywords

All-pay auction
Large auctions

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Large all-pay auctions with IPV bidders

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