On Optimal Head Starts in All-Pay Auctions

Seel, Christian and Wasser, Cédric. (2014) On Optimal Head Starts in All-Pay Auctions. Economics Letters, 124 (2). pp. 211-214.

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Official URL: https://edoc.unibas.ch/72614/

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We consider a two-player all-pay auction with symmetric independent private values that are uniformly distributed. The designer chooses the size of a head start that is given to one of the players. The designer’s objective is to maximize a convex combination of the expected highest effort and the expected aggregate effort. Unless the weight on the highest effort is one, small head starts are always worse than no head start. Moreover, the optimal head start is strictly positive if and only if the weight on the highest effort is large enough.
Faculties and Departments:06 Faculty of Business and Economics > Departement Wirtschaftswissenschaften > Professuren Wirtschaftswissenschaften > Mikroökonomische Theorie (Nöldeke)
UniBasel Contributors:Wasser, Cédric
Item Type:Article, refereed
Article Subtype:Research Article
Note:Publication type according to Uni Basel Research Database: Journal article
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Last Modified:12 Nov 2019 10:19
Deposited On:12 Nov 2019 10:19

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