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All-Pay Auctions with Budget Constraints

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  • Kotowski, Maciej
  • Li, Fei

Abstract

Consider an all-pay auction with interdependent, affiliated valuations and private budget constraints. We characterize a symmetric equilibrium for the case of two players. In contrast with the second-price auction, making budgets more severe can depress the bids of unconstrained bidders

Suggested Citation

  • Kotowski, Maciej & Li, Fei, 2011. "All-Pay Auctions with Budget Constraints," MPRA Paper 30468, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:30468
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    File URL: https://mpra.ub.uni-muenchen.de/35957/2/MPRA_paper_35957.pdf
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    References listed on IDEAS

    as
    1. Michael R. Baye & Dan Kovenock & Casper G. Vries, 1996. "The all-pay auction with complete information," Springer Books, in: Roger D. Congleton & Arye L. Hillman & Kai A. Konrad (ed.), 40 Years of Research on Rent Seeking 1, pages 209-223, Springer.
    2. Yeon-Koo Che & Ian Gale, 1998. "Standard Auctions with Financially Constrained Bidders," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 65(1), pages 1-21.
    3. Baye, M. & Kovenock, D. & de Vries, C., 1990. "The All-Pay Auction with Complete Information," Other publications TiSEM 8739e73c-3375-40b8-b29b-b, Tilburg University, School of Economics and Management.
    4. Kotowski, Maciej H., 2020. "First-price auctions with budget constraints," Theoretical Economics, Econometric Society, vol. 15(1), January.
    5. Fang, Hanming & Parreiras, Sergio O., 2002. "Equilibrium of Affiliated Value Second Price Auctions with Financially Constrained Bidders: The Two-Bidder Case," Games and Economic Behavior, Elsevier, vol. 39(2), pages 215-236, May.
    6. Krishna, Vijay & Morgan, John, 1997. "An Analysis of the War of Attrition and the All-Pay Auction," Journal of Economic Theory, Elsevier, vol. 72(2), pages 343-362, February.
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    Cited by:

    1. Natcher, David & Bachmann, Erika & Pittman, Jeremy & Kulshreshtha, Suren & Baco, Mohamed Nasser & Akponikpe, P. B. I. & Peak, Derek, 2016. "Knowledge Diffusion and the Adoption of Fertilizer Microdosing in Northwest Benin," Sustainable Agriculture Research, Canadian Center of Science and Education, vol. 5(3).
    2. Triana, Maria Andrea & Lamberts, Roberto & Sassi, Paola, 2015. "Characterisation of representative building typologies for social housing projects in Brazil and its energy performance," Energy Policy, Elsevier, vol. 87(C), pages 524-541.
    3. Kotowski, Maciej H. & Li, Fei, 2014. "On the continuous equilibria of affiliated-value, all-pay auctions with private budget constraints," Games and Economic Behavior, Elsevier, vol. 85(C), pages 84-108.

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    More about this item

    Keywords

    All-Pay Auction; Budget Constraints; Lobbying; War of Attrition; Common Values; Private Values;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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