Discussion Paper
No. 2017-22 |
May 08, 2017
Nash equilibria in all-pay auctions with discrete strategy space
Abstract
Using two-player all-pay auctions, the author fully characterizes the Nash equilibrium under a discrete bidding strategy space. In particular, he shows that under the random tie-breaking rule, the cardinality of the set of Nash equilibrium depends on the parity of the reward size and a continuum of Nash equilibria exists. Additionally, when a simple favor-one-sided tie-breaking rule is used, the equilibrium solution becomes independent of the reward size.
Comments and Questions