All-pay auctions with endogenous bid timing: an experimental study

All-pay auctions with endogenous bid timing: an experimental study Using a controlled laboratory experiment, we examine individuals’ bid timing decisions in complete information all-pay auctions and find that homogeneous bidders are more likely to enter the early bidding stage under a favor-early tie-breaking rule. Furthermore, revenue in an endogenous-entry treatment, in which both sequential and simultaneous all-pay auctions exist, is either lower than or equal to that in an exogenous-entry treatment with only simultaneous all-pay auctions. Additionally, in simultaneous all-pay auctions, individuals do not always employ a mixed strategy as predicted by the risk-neutral model. Instead, our data is better rationalized by a risk- and loss-aversion model. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Game Theory Springer Journals

All-pay auctions with endogenous bid timing: an experimental study

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Publisher
Springer Berlin Heidelberg
Copyright
Copyright © 2017 by Springer-Verlag GmbH Germany
Subject
Economics; Economic Theory/Quantitative Economics/Mathematical Methods; Game Theory, Economics, Social and Behav. Sciences; Behavioral/Experimental Economics; Operations Research/Decision Theory
ISSN
0020-7276
eISSN
1432-1270
D.O.I.
10.1007/s00182-017-0586-6
Publisher site
See Article on Publisher Site

Abstract

Using a controlled laboratory experiment, we examine individuals’ bid timing decisions in complete information all-pay auctions and find that homogeneous bidders are more likely to enter the early bidding stage under a favor-early tie-breaking rule. Furthermore, revenue in an endogenous-entry treatment, in which both sequential and simultaneous all-pay auctions exist, is either lower than or equal to that in an exogenous-entry treatment with only simultaneous all-pay auctions. Additionally, in simultaneous all-pay auctions, individuals do not always employ a mixed strategy as predicted by the risk-neutral model. Instead, our data is better rationalized by a risk- and loss-aversion model.

Journal

International Journal of Game TheorySpringer Journals

Published: Aug 11, 2017

References

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