Expected Revenue of All-Pay and First-Price Sealed-Bid Auctions with Affiliated Signals
In: Journal of Economics, Jg. 61 (1995) ; Nr. 3, S. 273-279
Zeitschriftenaufsatz / Fach: Wirtschaftswissenschaften
In the general symmetric auction framework of Milgrom and Weber (1982) it is shown - as a new manifestation of the linkage principle - that the all-pay sealed-bid auction yields higher expected revenue than the standard first-price sealed-bid auction. This raises the question why sealed-bid auctions of the standard first-price variety are observed in practice whereas the all-pay variety is not.