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Disclosure Policies in All-pay Auctions with Affiliation

Author

Listed:
  • Bo Chen
  • Marco Serena
  • Zijia Wang

Abstract

We study all-pay auctions with private and affiliated binary values. To increase revenue (i.e., expected aggregate bid), the auction organizer can commit ex ante to fully disclosing or concealing bidders’ valuations. We find that full disclosure, as opposed to full concealment, always increases bidders’ expected payoffs. If affiliation in bidders’ valuations is low, full disclosure lowers ex ante expected revenue. If affiliation is high: 1) with two bidders, full disclosure lowers expected revenue, and 2) with many bidders, it tends to increase expected revenue. When the low valuation is zero, the auction becomes one with stochastic but affiliated participation, and information disclosure affects neither bidders’ payoffs nor the expected revenue.

Suggested Citation

  • Bo Chen & Marco Serena & Zijia Wang, 2023. "Disclosure Policies in All-pay Auctions with Affiliation," Working Papers tax-mpg-rps-2023-05, Max Planck Institute for Tax Law and Public Finance.
  • Handle: RePEc:mpi:wpaper:tax-mpg-rps-2023-05
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    References listed on IDEAS

    as
    1. Chi, Chang Koo & Murto, Pauli & Välimäki, Juuso, 2019. "All-pay auctions with affiliated binary signals," Journal of Economic Theory, Elsevier, vol. 179(C), pages 99-130.
    2. Chen, Bo & Jiang, Xiandeng & Knyazev, Dmitriy, 2017. "On disclosure policies in all-pay auctions with stochastic entry," Journal of Mathematical Economics, Elsevier, vol. 70(C), pages 66-73.
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    More about this item

    Keywords

    All-pay auction; Affiliation; Stochastic participation; Disclosure policies;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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