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Title:Silent interests and all-pay auctions PDF Logo
Authors:Konrad, Kai A.
Issue Date:2005
Series/Report no.:CESifo working papers 1473
Abstract:If firms compete in all-pay auctions with complete information, silent shareholdings introduce asymmetric externalities into the all-pay auction framework. If the strongest firm owns a large share in the second strongest firm, this may make the strongest firm abstain from bidding. As a consequence, equilibrium profits of both firms may increase, but the prize may be allocated less efficiently. The reverse ownership structure is also likely to increase the profits of the firms involved in the ownership relationship but without these negative efficiency effects.
Subjects:all-pay auctions
externalities
contests
silent minority shareholdings
ownership structure
JEL:L11
D44
L41
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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