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All-Pay Auctions with Handicaps

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  • Minoru Kitahara
  • Ryo Ogawa

Abstract

An all-pay auction in which the winner is determined according to the sum of the bid and the handicap, the latter of which is endowed to the players, is analyzed. The bidding strategy in an equilibrium is explicitly derived as a "piecewise affine transformation" of the equilibrium strategy in the all-pay auction without handicaps. Allocation rule implemented in the equilibrium and revenue comparison are also discussed.

Suggested Citation

  • Minoru Kitahara & Ryo Ogawa, 2010. "All-Pay Auctions with Handicaps," ISER Discussion Paper 0781, Institute of Social and Economic Research, Osaka University, revised Jun 2010.
    • Handle: RePEc:dpr:wpaper:0781
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    File URL: https://www.iser.osaka-u.ac.jp/library/dp/2010/DP0781.pdf
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    References listed on IDEAS

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