Research

(Submitted)
This paper establishes generic existence of a unique equilibrium in the symmetric two-player binary-signal all-pay auction with arbitrarily correlated signals and interdependent valuations. Further, it provides a complete characterization for all parameter values and proves that the equilibrium is symmetric and weakly monotone. In equilibrium, the bid supports are ordered by the strong set order, and yet the bid supports of a low signal player can overlap with that of a high signal player. Hence, in a symmetric weakly monotone equilibrium, a bidder with a low signal can outbid a high signal player. Applying the model to elections shows that a candidate receiving good news from the polls behaves in a rationally overconfident manner, making it possible for the other candidate to win the election in an upset. 

Please click here to read the current version (October 2, 2023)
Online Appendix

The Atomic Age has been relatively peaceful, characterized by the absence of large-scale military conflicts between countries with atomic weapons. The standard explanation is that atomic weapons are a deterrent. This paper offers an alternative explanation: that this peace results from known symmetry in military power. This paper considers a mediation model in which an endogenous war follows peace negations in case they break down. Two players compete over a prize with an uncertain but common value, but each player has a private signal regarding this value. This paper shows that when the players are known to be symmetric in military power, there is essentially a unique perfect Bayesian equilibrium, which is entirely peaceful. If we allow the player to differ in military power or make military power uncertain, war may occur in equilibrium.

Currently being rewritten. 

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