Behavior in all-pay auctions with incomplete information

Charles Noussair; Jonathon Silver

doi:10.1016/j.geb.2005.01.005

Behavior in all-pay auctions with incomplete information

Charles Noussair, Jonathon Silver

Research output: Contribution to journal › Article › peer-review

46 Scopus citations

Abstract

This paper analyzes the behavior of single-unit all-pay auctions within the independent private values environment in the laboratory. We study revenue, individual bidding behavior, and efficiency, in relation to theoretical benchmarks and to a similar study of winner-pay first-price sealed-bid auctions. We conclude that the all-pay auction yields significantly higher revenue than both the risk-neutral Bayesian equilibrium and the winner-pay auction. Bidders' decisions move closer to equilibrium levels over time in the auction.

Original language	English (US)
Pages (from-to)	189-206
Number of pages	18
Journal	Games and Economic Behavior
Volume	55
Issue number	1
DOIs	https://doi.org/10.1016/j.geb.2005.01.005
State	Published - Apr 2006
Externally published	Yes

Keywords

All-pay
Auction
Experiment

ASJC Scopus subject areas

Finance
Economics and Econometrics

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10.1016/j.geb.2005.01.005

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title = "Behavior in all-pay auctions with incomplete information",

abstract = "This paper analyzes the behavior of single-unit all-pay auctions within the independent private values environment in the laboratory. We study revenue, individual bidding behavior, and efficiency, in relation to theoretical benchmarks and to a similar study of winner-pay first-price sealed-bid auctions. We conclude that the all-pay auction yields significantly higher revenue than both the risk-neutral Bayesian equilibrium and the winner-pay auction. Bidders' decisions move closer to equilibrium levels over time in the auction.",

keywords = "All-pay, Auction, Experiment",

author = "Charles Noussair and Jonathon Silver",

note = "Funding Information: We thank Emory College for financial support as well as James Cox, Christopher Curran, Steven Gjerstad, Glenn Harrison, Joseph Henrich, Tony Kwasnica, Tim Salmon, Jason Shachat, Stephen Silver, and two anonymous referees for helpful comments.",

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AU - Silver, Jonathon

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N2 - This paper analyzes the behavior of single-unit all-pay auctions within the independent private values environment in the laboratory. We study revenue, individual bidding behavior, and efficiency, in relation to theoretical benchmarks and to a similar study of winner-pay first-price sealed-bid auctions. We conclude that the all-pay auction yields significantly higher revenue than both the risk-neutral Bayesian equilibrium and the winner-pay auction. Bidders' decisions move closer to equilibrium levels over time in the auction.

AB - This paper analyzes the behavior of single-unit all-pay auctions within the independent private values environment in the laboratory. We study revenue, individual bidding behavior, and efficiency, in relation to theoretical benchmarks and to a similar study of winner-pay first-price sealed-bid auctions. We conclude that the all-pay auction yields significantly higher revenue than both the risk-neutral Bayesian equilibrium and the winner-pay auction. Bidders' decisions move closer to equilibrium levels over time in the auction.

KW - All-pay

KW - Auction

KW - Experiment

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SP - 189

EP - 206

JO - Games and Economic Behavior

JF - Games and Economic Behavior

IS - 1

ER -

Behavior in all-pay auctions with incomplete information

Abstract

Keywords

ASJC Scopus subject areas

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