Empirical Evidence on Competition and Revenue in an All-Pay Contest

Empirical Evidence on Competition and Revenue in an All-Pay Contest The total revenue from an “all-pay contest” is the sum of expenditures from all individual players, so it is important to ask whether it increases with the number of actual players—which is our definition of competition. This is the first paper to use field data to study this question empirically. Using novel instrumental variables, we document strong empirical evidence that the revenue of a penny auction—which is a form of all-pay contest that recently emerged on the Internet—increases with the number of bidders. Our findings cast doubt on the standard model of all-pay contests that presumes that all bidders are fully informed. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Industrial Organization Springer Journals

Empirical Evidence on Competition and Revenue in an All-Pay Contest

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Publisher
Springer US
Copyright
Copyright © 2016 by Springer Science+Business Media New York
Subject
Economics; Industrial Organization; Microeconomics
ISSN
0889-938X
eISSN
1573-7160
D.O.I.
10.1007/s11151-016-9511-6
Publisher site
See Article on Publisher Site

References

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