Working Paper: CEPR ID: DP16506
Authors: Aner Sela; Ofer Levi; David Lagziel; Chen Cohen
Abstract: We study complete information all-pay contests with n players and two heterogeneous prizes with distinct values. Among the players, n - 1 are symmetric (i.e., they evaluate the prizes in a similar manner), whereas the remaining player has different valuations than his opponents for each of the prizes. Our analysis focuses on the equilibrium profiles and expected payoffs for the case of three players, and we partially extend our analysis for cases with additional players. Our results show that in all-pay auctions with heterogeneous prizes, the ordering of the players according to their expected payoffs in equilibrium might vary significantly, depending on both prizes. In particular, although the values for the first (larger) prize have the greatest effect on the identity of the players with positive expected payoffs, the value of the second prize might have a non-negligible effect.
Keywords: allpay contests; multiple prizes; complete information
JEL Codes: D44; D82
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| first larger prize value (D44) | identity of players with positive expected payoffs (C72) |
| second prize value (D44) | ordering of players by expected payoffs (C72) |
| asymmetric player valuation (C79) | expected payoff of asymmetric player (C72) |
| prize structure (D44) | player behavior (C72) |
| valuations of all prizes (D44) | ordering of players by expected payoffs (C72) |