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Title:Jump bidding and budget constraints in all-pay auctions and wars of attrition PDF Logo
Authors:Dekel, Eddie
Jackson, Matthew O.
Wolinsky, Asher
Issue Date:2007
Series/Report no.:Discussion paper // Center for Mathematical Studies in Economics and Management Science 1454
Abstract:We study all-pay auctions (or wars of attrition), where the highest bidder wins an object, but all bidders pay their bids. We consider such auctions when two bidders alternate in raising their bids and where all aspects of the auction are common knowledge including bidders.valuations. We analyze how the ability to .jump-bid,. or raise bids by more than the minimal necessary increment aĆ¾ects the outcome of the auction. We also study the impact of budget caps on total bids. We show that both of these features, which are common in practice but absent from the previous literature, matter signi.cantly in determining the outcome of the auctions.
Subjects:All-Pay auctions
jump-bidding
auctions
war of attrition.
JEL:C62
C63
C72
D44
D82
Document Type:Working Paper
Appears in Collections:Discussion Papers, Kellogg School of Management, Northwestern University

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