A Comparison of Multiple-Unit All-Pay and Winner-Pay Auctions Under Incomplete Information

This article examines the properties of independent-private-value all-pay and winner-pay auctions when there are multiple units sold. We study bidding behavior, efficiency, and revenue in a set of 23 experimental sessions. Our data show that the all-pay auction and the winner-pay auction are empirically revenue equivalent, though both yield higher revenue than the risk neutral Bayesian equilibrium. Our evidence also suggests that the winner-pay auction is more likely to lead to a Pareto-efficient allocation than the all-pay auction