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The value of information in asymmetric all-pay auctions

Article
Author/s: 
Christian Seel
Games and Economic Behavior
Publisher: 
Elsevier
Year: 
2014
Journal pages: 
330–338
Webpage [1]
This note analyzes a two-player all-pay auction with incomplete information. More precisely, one bidder is uncertain about the size of the initial advantage of his rival modeled as a head start in the auction. I derive the unique Bayesian Nash equilibrium outcome for a large class of cumulative distribution functions of the head start. The stronger player generates an informational rent if and only if his head start distribution is not stochastically dominated by a uniform distribution. I identify why my results for an uncertain head start differ qualitatively from uncertainty about a cost function or a valuation.
Tags: 
Game Theory & Graphs [2]

Source URL:http://coalitiontheory.net/content/value-information-asymmetric-all-pay-auctions

Links
[1] http://www.sciencedirect.com/science/article/pii/S0899825614000785 [2] http://coalitiontheory.net/research-areas/game-theory-graphs