Non-Monotoniticies and the All-pay Auction Tie-Breaking Rule

  1. Araujo, Aloisio
  2. de Castro, Luciano I.
  3. Moreira, Humberto
Revista:
Documentos de trabajo. Economic series ( Universidad Carlos III. Departamento de Economía )

Año de publicación: 2006

Número: 59

Tipo: Documento de Trabajo

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Resumen

Discontinuous games, such as auctions, may require special tie-breaking rules to guarantee equilibrium existence. The best results available ensure equilibrium existence only in mixed strategy with endogenously defined tie-breaking rules and communication of private information. We show that an all-pay auction tie-breaking rule is sufficient for the existence of pure strategy equilibrium in a class of auctions. The rule is explicitly defined and does not require communication of private information. We also characterize when special tie-breaking rules are really needed.

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