Contests with small noise and the robustness of the all-pay auction

Arbeitspapier

This paper considers all-pay contests in which the relationship between bids and allocations reflects a small amount of noise. Prior work had focused on one particular equilibrium. However, there may be other equilibria. To address this issue, we introduce a new and intuitive measure for the proximity to the all-pay auction. This allows, in particular, to provide simple conditions under which actually any equilibrium of the contest is both payoff equivalent and revenue equivalent to the unique equilibrium of the corresponding all-pay auction. The results are shown to have powerful implications for monopoly licensing, political lobbying, electoral competition, optimally biased contests, the empirical analysis of rent-seeking, and dynamic contests.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 186

Classification and Topics

• Classification: Wirtschaft ; Noncooperative Games ; Rationing; Licensing ; Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior ; Monopoly; Monopolization Strategies
• Subject: Contests ; increasing returns ; mixed-strategy Nash equilibrium ; robustness of the all-pay auction ; payoff equivalence ; revenue equivalence

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Ewerhart, Christian
• Event: Veröffentlichung
• (who): University of Zurich, Department of Economics
• (where): Zurich
• (when): 2017

Further information

• DOI: doi:10.5167/uzh-107344
• Handle: http://hdl.handle.net/10419/173405
• Last update: 10.03.2025, 11:43 AM CET