All-pay auction

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The all-pay auction is a special form of auction . The bidders in this auction have to pay all their bids (all pay), regardless of which bidder wins the bid . There are two (three) basic forms: In the American auction and the penny auction , the winner is determined after the auction time has expired. All stakes are usually the same, the winner is the last bidder, who at the penny auction also has to pay a final price determined from the number of bids. In the other form, an indefinite number of bidders or groups of bidders secretly submit bids to an auctioneer. After a period has expired, the bids are compared, the bidder or group of bidders with the highest (overall) bid wins the bid, and if the bids are the same, the goods or the auction item are divided. This article covers this second form.

application

In practice, this auction model is not used because it is perceived as unfair. However, in auction theory it is a model that primarily explains the economic effects of lobbying , bribery and party donations.

In the case of party donations, the bidders are the donors, the auction goods are the party or candidate victory and the seller, i.e. the recipient, is the parties or the campaign manager behind them. The bidders donate so that their candidate / party wins. According to the model, the party that received more donations and used them in the election campaign wins. However, regardless of the election result, all bidders are poorer in terms of their donations.

It can be used as an auction in the Play by eMail genre .

Individual evidence

  1. ↑ Mario Martini: The market as an instrument of sovereign distribution control: Possibilities and limits of a market-controlled state administration of shortages, 2008, ISBN 9783161493324 , page 324, online
  2. ↑ Naciye Akca: Auctions for the National Reallocation of Greenhouse Gas Emission Allowances and Greenhouse Gas Emission Credits at Company Level : A Game Theoretical Non-Cooperative Modeling and Solution Approach for the Reallocation Problem , 2008, ISBN 3834911593 , page 83-84, online