Now showing items 1-3 of 3
Rational benevolence in small committees
(Working paper; Arbeidsnotat, 2006-09)
We consider a pie-splitting game involving three committee members. In response to the large literature on sequential procedures in this type of game, we propose an institution that is inspired by auction theory. The (sealed) bids of the players are proposals for a distribution of the pie and are given simultaneously. If any of the bids is preferred to all others in a pairwise comparison (i.e. ...
The all-pay auction with cross-shareholdings
(Working paper; Arbeidsnotat, 2007-02)
We consider an all-pay auction between several firms under asymmetric information in which each firm owns a share in its rival. We characterize the equilibrium and show how much these cross-shareholdings serve to dampen competition. Additionally, we explain why the well known relationship between the equilibrium strategies of the standard first price and all-pay auctions breaks down in our setting.
Contingent payments in selection contests
(Working paper; Arbeidsnotat, 2005-04)
The early literature on research contests stressed the advantages of a fixed prize in inspiring R&D effort. More recently the focus has moved towards endogenizing the rewards to research activity in these tournament settings, since this can induce extra effort or enhance the surplus of the buyer. We focus on a research contest as a means of selecting a partner for an R&D enterprise, in an ...