Consider a contest for a prize in which each player knows his/her own ability, but may or may not know those of his/her rivals (the complete or incomplete information regimes). Our main result is that, if the value of the prize is high, more effort and output are engendered under incomplete...

We derive several implications of incentive compatibility in general (i.e., not necessarily quasilinear) environments. Building on Kos and Messner (2013), we provide a (partial) characterization of incentive compatible mechanisms.

We prove that the maximal bid in asymmetric first-price and all-pay auctions is the same for all bidders. Our proof is elementary, and does not require that bidders are risk neutral, or that the distribution functions of their valuations are independent or smooth.

This paper describes a nearly optimal auction mechanism that does not require previous knowledge of the distribution of values of potential buyers. The mechanism we propose builds on the new literature on the elicitation of information from experts. We extend the latter to the case where the...

We consider two-player, perfectly discriminatory, common-value contests (or all-pay auctions), in which one player knows the value of the contested object with certainty, and the other knows only its prior distribution. We show, among other things, that in equilibrium the players win with equal...

We consider a two-player all-pay auction with symmetric independent private values that are uniformly distributed. The designer chooses the size of a head start that is given to one of the players. The designer’s objective is to maximize a convex combination of the expected highest effort and...

This paper presents a model of preemptive bidding in takeover auctions with toeholds. It shows that when the first bidder owns a fraction of the target firm he is more likely to deter competition and a smaller jump bid is required to do so. It also shows that in the presence of the toehold, the...

This article proposes a nonlinear scoring rule which transforms multiple attributes of a bid into comparable dimensionless ones. Practically, the buyer can use it to select the most competitive winner. For risk-neutral bidders, we characterize a symmetric Bayes–Nash equilibrium and find that...

This paper models the data generating process of common value auctions in a parameter-estimation way, known as the classical approach in statistical inference. Viewing the true value of the object as a parameter that nobody ever knows, we let our value function be the average of the individual...

We establish the effort-maximizing rule of allocating heterogeneous prizes when contestants privately observe their effort efficiencies. With ex ante symmetric players and increasing virtual effort efficiency, an all pay auction maximizes the total expected effort.