Research

(Submitted)

We study two-player all-pay auctions with binary signals, allowing for arbitrary correlation and interdependent values. Such environments arise naturally in auctions and contests, but equilibrium behavior is poorly understood outside benchmark cases that support monotone bidding. Under a mild generic condition, we prove existence and global uniqueness of equilibrium. The equilibrium is symmetric and weakly monotone, and we fully characterize four equilibrium forms that partition the space of primitives.

We then apply the general framework to a private-values model and a common-values model, introducing a continuous measure of correlation ranging from perfect negative to perfect positive correlation. We find that seller revenue, or total effort in a contest interpretation, is non-monotone in correlation. In particular, the standard intuition that revenue increases with correlation need not hold in two-thirds of the parameter space. Our results show that this intuition is valid only in the region where a monotone equilibrium exists. Moving beyond monotone equilibrium is therefore essential for understanding how informational dependence shapes outcomes in all-pay auctions.

Please click here to read the current version (April 23, 2026)

Online Appendix

(Submitted) 

This paper develops a dynamic model of conflict mediation over a natural resource whose value is uncertain. Two countries, differing in military power and each receiving a correlated private signal about the resource’s value, decide whether to accept a mediator’s proposed division or resort to war, modeled as an all pay auction. The central mechanism is a \textit{winner’s curse of war}: information that makes the resource appear more valuable also induces stronger resistance by the opponent, raising the expected costs of conflict. When countries are equally powerful, there exists an essentially unique Perfect Bayesian equilibrium that is entirely peaceful, implying that differences in beliefs about the resource’s common value alone cannot cause war. By contrast, unequal or uncertain military power can eliminate a fully peaceful outcome, because the stronger or perceived stronger country earns a power rent. The paper identifies conditions under which war can be averted in conflicts over natural resources.

Please click here to read the current version (March 13, 2026)

Joint work with Matz Dahlberg, Mikael Lundholm and Mattias Nordin
(Submitted)

A core question in economics is how to sell an object in a way that maximizes revenue. We study a field experiment, run in collaboration with the Swedish Enforcement Authority over three years, that randomly assigns foreclosed properties to auction or brokered sale, to examine how the two sales modes affect prices. Brokered sales outperform auctions, selling for 15% higher prices, and there is a discount in auction sales only. We theoretically explain the discount with barriers to participation in the auctions, which lead to the presence of professional buyers. Individual-level historical data on foreclosure sales support the proposed mechanism.

Please click here to read the current version (October 8, 2025)

Recently, the all-pay auction literature has characterized equilibria that are not monotone in the traditional sense for a setting with two types. However, no such characterizations have been made for a general N-type space. This is because the binary type space allows for a guess-verify approach. Since the amount of possible guesses increases rapidly, such an approach is infeasible for larger type spaces. I characterize the set of symmetric equilibria in a general N-type two-player all-pay auction with arbitrary type dependency and interdependent valuations. My approach is centered around linear algebra techniques and a novel notion of a weakly monotone equilibrium. In a weakly monotone equilibrium the bid supports are ordered by the strong set order, but not necessarily separated like the traditional monotone equilibrium. I classify these weakly monotone equilibria into four primary forms. I characterize each form and find sufficient conditions for their existence. Furthermore, for the model used in Rentschler and Turocy (2016), I provide a novel necessary and sufficient condition for the existence of a traditional monotone equilibrium.

Please contact me for a current version: henk.schouten@nek.uu.se

This paper investigates a class of multi-stage conflict games in which the final stage of the game is an all-pay auction. In this class of games, two possibly asymmetric players compete over a prize whose value may depend on both players’ private information. The actions played in the finitely many communication stages may increase the dependence between the players’ private information. This increased dependence can lead to the non-existence of a monotone equilibrium in the all-pay auction stage game. I provide a sufficient condition on the primitives that bounds this dependence. Thus, all equilibria in the final stage game are guaranteed to be monotone without endogenous restriction on the player’s actions.

Please contact me for a current version: henk.schouten@nek.uu.se