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

• Autores: Aloisio Araujo, Luciano I. de Castro, Humberto Moreira
• Localización: Documentos de trabajo. Economic series ( Universidad Carlos III. Departamento de Economía ), Nº. 59, 2006
• Idioma: inglés
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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.