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

Departamento de Economía de la Empresa Universidad Carlos III de Madrid Working Paper 06-59, Economics Series 24, October 2006

29 Pages Posted: 26 Sep 2013

See all articles by Aloisio Araujo

Aloisio Araujo

Getulio Vargas Foundation (FGV) - FGV/EPGE Escola Brasileira de Economia e Finanças

Luciano I. de Castro

Tippie College of Business; IMPA

Humberto Moreira

Fundacao Getulio Vargas (FGV)

Date Written: January 25, 2008

Abstract

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

Keywords: Auctions, Pure strategy equilibria, Non-monotonic bidding functions, Tie-breaking rules, Necessary and suficient conditions for equilibrium, Multidimensional types

JEL Classification: C62, C72, D44, D82

Suggested Citation

Araujo, Aloisio and de Castro, Luciano I. and Moreira, Humberto, Non-Monotoniticies and the All-Pay Auction Tie-Breaking Rule (January 25, 2008). Departamento de Economía de la Empresa Universidad Carlos III de Madrid Working Paper 06-59, Economics Series 24, October 2006, Available at SSRN: https://ssrn.com/abstract=2330515

Aloisio Araujo (Contact Author)

Getulio Vargas Foundation (FGV) - FGV/EPGE Escola Brasileira de Economia e Finanças ( email )

Praia de Botafogo 190/1125, CEP
Rio de Janeiro RJ 22253-900
Brazil

Luciano I. De Castro

Tippie College of Business ( email )

108 Pappajohn Building
Iowa City, IA 52242
United States

HOME PAGE: http://https://lucianodecastro.net/

IMPA ( email )

Estrada Dona Castorina 110
Jardim Botanico
Rio de Janeiro, 22460
55 21 2529 5168 (Phone)
55 21 2529 5129 (Fax)

HOME PAGE: www.impa.br/~luciano

Humberto Moreira

Fundacao Getulio Vargas (FGV) ( email )

R. Dr. Neto de Araujo 320 cj 1307
Rio de Janeiro, Rio de Janeiro 22250-900
Brazil

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