All-pay auctions with handicaps

This paper analyzes an all-pay auction where the winner is determined according to the sum of the bid and a handicap endowed to all players. The bidding strategy in equilibrium is then explicitly derived as a “piecewise affine transformation” of the equilibrium strategy in an all-pay auction without handicaps. The paper also discusses the allocation rule implemented in the equilibrium and provides a comparison of revenue. -- Asymmetric auctions ; all-pay auctions ; handicap auctions