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
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: Suggested Citation