All-pay auction

All-pay auction

In economics and game theory an all-pay auction, is an auction in which all bidders must pay regardless of whether they win the prize, which is awarded to the highest bidder as in a conventional auction. The all-pay auction is often used to model lobbying (bids are political contributions), or other competitions such as contests between animals.

The most straight-forward form of an all-pay auction is a Tullock auction, sometimes called a tullock lottery, in which everyone submits a bid but both the losers and the winners pay their submitted bids. This is instrumental in describing certain ideas in public choice economics. The dollar auction is a two player Tullock auction, or a multiplayer game in which only the two highest bidders pay their bids.

Other forms of all-pay auctions exist, such as the war of attrition, in which the highest bidder wins, but all (or both, more typically) bidders pay only the lower bid. The war of attrition is used by biologists to model conventional contests, or agonistic interactions resolved without recourse to physical aggression.

External links

* [http://www.econtalk.org/archives/2006/06/giving_away_mon.html Econ Talk podcast where economic professors discuss grants as a all-pay or Tullock auction.]


Wikimedia Foundation. 2010.

Игры ⚽ Нужно сделать НИР?

Look at other dictionaries:

  • Auction theory — is an applied branch of game theory which deals with how people act in auction markets and researches the game theoretic properties of auction markets. There are many possible designs (or sets of rules) for an auction and typical issues studied… …   Wikipedia

  • Auction — Auctioneer redirects here. For the DC Comics supervillain, see Auctioneer (comics). An auctioneer and her assistants scan the crowd for bidders. An auction is a process of buying and selling goods or services by offering them up for bid, taking… …   Wikipedia

  • Auction rate security — An auction rate security (ARS) typically refers to a debt instrument (corporate or municipal bonds) with a long term nominal maturity for which the interest rate is regularly reset through a dutch auction. It could also refer to a preferred stock …   Wikipedia

  • auction — A common method of issuing gilts. Similar to a tender offer. In an auction, investors apply to buy the new gilts being issued, specifying the amount they wish to purchase and the price they are prepared to pay. The new gilts will be issued to… …   Financial and business terms

  • Auction sniping — is the process of watching a timed online auction (such as on eBay), and placing a winning bid at the last possible moment (often seconds before the end of the auction), giving the other bidders no time to outbid the sniper. Some bidders do this… …   Wikipedia

  • Dollar auction — The dollar auction is a non zero sum sequential game designed by economist Martin Shubik to illustrate a paradox brought about by traditional rational choice theory in which players with perfect information in the game are compelled to make an… …   Wikipedia

  • Pay per click — Internet marketing Display advertising Email marketing E mail marketing software Interactive advertising …   Wikipedia

  • auction call — noun The option to call a securitized bond usually after a set time period or after the deals assets have amortized substantially. Typically, the deals trustee places the entire portfolio of assets up for bid. The highest bid wins the auction and …   Wiktionary

  • Auction Market — A market in which buyers enter competitive bids and sellers enter competitive offers at the same time. The price a stock is traded represents the highest price that a buyer is willing to pay and the lowest price that a seller is willing to sell… …   Investment dictionary

  • Dutch auction — 1957 in Germany to sell fruits A Dutch auction is a type of auction where the auctioneer begins with a high asking price which is lowered until some participant is willing to accept the auctioneer s price, or a predetermined reserve price (the… …   Wikipedia

Share the article and excerpts

Direct link
… Do a right-click on the link above
and select “Copy Link”