Franke, Jörg
[VerfasserIn]
;
Leininger, Wolfgang
[Sonstige Person, Familie und Körperschaft];
Wasser, Cédric
[Sonstige Person, Familie und Körperschaft]
Optimal Favoritism in All-Pay Auctions and Lottery Contests
Erschienen in:CESifo Working Paper Series ; No. 6274
Umfang:
1 Online-Ressource (33 p)
Sprache:
Englisch
DOI:
10.2139/ssrn.2912082
Identifikator:
Entstehung:
Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments December 2016 erstellt
Beschreibung:
We analyze the revenue-enhancing potential of favoring specific contestants in complete information all-pay auctions and lottery contests with several heterogeneous contestants. Two instruments of favoritism are considered: head starts that are added to the bids of specific contestants and multiplicative biases that give idiosyncratic weights to the bids. In the all-pay auction, head starts are more effective than biases while optimally combining both instruments even yields first-best revenue. In the lottery contest, head starts are less effective than biases and combining both instruments cannot further increase revenue. As all-pay auctions revenue-dominate lottery contests under optimal biases, we thus obtain an unambiguous revenue-ranking of all six combinations of contest formats and instruments