Exclusion in the all-pay auction: an experimental investigation
Contest designers or managers who want to maximize the overall revenue of a contest (relative performance scheme) are frequently concerned with a trade-off between contest homogeneity and inclusion of contestants with high valuations. In our experimental study, we find that it is not profitable to e...
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| Main Authors: | , |
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| Format: | Book/Monograph Working Paper |
| Language: | English |
| Published: |
Berlin, Germany
Wissenschaftszentrum Berlin für Sozialforschung gGmbH
[2017]
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| Edition: | Revised version of the WZB Discussion Paper SP II 2014-206 |
| Series: | Discussion paper / (WZB) Berlin Social Science Center, Research Area: Markets and Choice, Research Unit: Market Behavior
SP II 2017, 202 (April 2017) |
| In: |
Discussion paper (SP II 2017, 202 (April 2017))
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| Subjects: | |
| Online Access: | Resolving-System, Volltext: http://hdl.handle.net/10419/157372 Verlag, Volltext: https://bibliothek.wzb.eu/pdf/2017/ii17-202.pdf 
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| Author Notes: | Dietmar Fehr, Julia Schmid |
| Summary: | Contest designers or managers who want to maximize the overall revenue of a contest (relative performance scheme) are frequently concerned with a trade-off between contest homogeneity and inclusion of contestants with high valuations. In our experimental study, we find that it is not profitable to exclude the most able bidder in favor of greater homogeneity among the remaining bidders, even if the theoretical exclusion principle predicts otherwise. This is because the strongest bidders are willing to give up a substantial part of their expected rent and prefer a strategy that ensures a lower but secure pay-off. |
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| Physical Description: | Online Resource |