(The All-Pay Auction). The seller has an item for sale. The valuations of the bidders are independently and identically distributed on R+ with a c.d.f. F. Find the symmetric equilibrium of an auction with two bidders in which both bidders pay their own bids but only the highest bidder wins the object. Show that each bidder’s expected payment is the same in this auction and in the first-price auction.

(The All-Pay Auction). The seller has an item for sale. The valuations of the bidders are independently and identically distributed on R+ with a c.d.f. F. Find the symmetric equilibrium of an auction with two bidders in which both bidders pay their own bids but only the highest bidder wins the object. Show that each bidder’s expected payment is the same in this auction and in the first-price auction.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter15A: Auction Design And Information Economics

Section: Chapter Questions

Problem 5E

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