Suppose there are N bidders competing for a single object in an all-pay auction. Each bidder has an i.i.d value vi for the object drawn from some continuous distribution F with support [0, M ]. (a) Show that there is a symmetric equilibrium in increasing strategies. (b) What is the expected revenue generated by this auction in the equilibrium from (a)? Elaborate the explanation on both the answers.

Suppose there are N bidders competing for a single object in an all-pay auction. Each bidder has an i.i.d value vi for the object drawn from some continuous distribution F with support [0, M ]. (a) Show that there is a symmetric equilibrium in increasing strategies. (b) What is the expected revenue generated by this auction in the equilibrium from (a)? Elaborate the explanation on both the answers.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter18: Asymmetric Information

Section: Chapter Questions

Problem 18.8P

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