Kai A. Konrad
, Wolfgang Peters
and Karl Wärneryd
Kai A. Konrad: Free University of Berlin, Postal: Boltzmannstrasse 20, D-14195 Berlin, Germany
Wolfgang Peters: The European University Viadrina, Postal: Grosse Scharrnstrasse 59, D-15230 Frankfurt/Oder, Germany
Karl Wärneryd: Dept. of Economics, Stockholm School of Economics, Postal: Box 6501, S-113 83 Stockholm, Sweden
Abstract: In a first-price all-pay auction buyers have an incentive to delegate the bidding to agents and to provide these agents with incentives to make bids that differ from the bids the buyers would like to make. Both buyers are better off in this strictly non-cooperative delegation equilibrium and the delegation contracts are asymmetric, even if the buyers and the auction are perfectly symmetric.
12 pages, April 22, 1999
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