On the continuous equilibria of affiliated-value, all-pay auctions with private budget constraints
![Thumbnail](/bitstream/handle/1/11718166/Kotowski-OnTheContinuous.pdf.jpg?sequence=3&isAllowed=y)
View/ Open
Published Version
https://doi.org/10.1016/j.geb.2014.01.014Metadata
Show full item recordCitation
Kotowski, Maciej H., and Fei Li. 2014. “On the continuous equilibria of affiliated-value, all-pay auctions with private budget constraints.” Games and Economic Behavior (February). doi:10.1016/j.geb.2014.01.014. http://dx.doi.org/10.1016/j.geb.2014.01.014.Abstract
We consider all-pay auctions in the presence of interdependent, affiliated valuations and private budget constraints. For the sealed-bid, all-pay auction we characterize a symmetric equilibrium in continuous strategies for the case of N bidders. Budget constraints encourage more aggressive bidding among participants with large endowments and intermediate valuations. We extend our results to the war of attrition where we show that budget constraints lead to a uniform amplification of equilibrium bids among bidders with sufficient endowments. An example shows that with both interdependent valuations and private budget constraints, a revenue ranking between the two auction formats is generally not possible. Equilibria with discontinuous bidding strategies are discussed.Terms of Use
This article is made available under the terms and conditions applicable to Open Access Policy Articles, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#OAPCitable link to this page
http://nrs.harvard.edu/urn-3:HUL.InstRepos:11718166
Collections
- HKS Faculty Scholarship [762]
Contact administrator regarding this item (to report mistakes or request changes)