Asymmetric All-Pay Auctions with Incomplete Information: The Two-Player Case

Abstract We prove existence and uniqueness of (Bayesian) equilibrium for a class of generally asymmetric all-pay auctions with incomplete information. Due to its importance in applications some prominence is given to the first-price all-pay auction, for which a detailed characterization of equilibrium and an approximation to equilibrium of its well-studied complete information version are supplied. Furthermore, we relate our uniqueness result to the well-known multiplicity of equilibria in the “war of attrition” (second-price all-pay auction), which emerges as a “limit” point of the class of two-player auction games considered.Journalof Economic LiteratureClassification Numbers: D44, C62, C72.

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