Silent interests and all-pay auctions

If firms compete in all-pay auctions with complete information, silent shareholdings introduce asymmetric externalities into the all-pay auction framework. If the strongest firm owns a large share in the second strongest firm, this may make the strongest firm abstain from bidding. As a consequence, equilibrium profits of both firms may increase, but the prize may be allocated less efficiently. The reverse ownership structure is also likely to increase the profits of the firms involved in the ownership relationship but without these negative efficiency effects.

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Year of publication:	2005
Authors:	Konrad, Kai A.
Publisher:	Munich : Center for Economic Studies and ifo Institute (CESifo)
Subject:	Auktionstheorie \| Wettbewerb \| Stille Gesellschaft \| Eigentümerstruktur \| Wirtschaftliche Effizienz \| Theorie \| all-pay auctions \| externalities \| contests \| silent minority shareholdings \| ownership structure

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Series:	CESifo Working Paper ; 1473
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	488944813 [GVK] hdl:10419/18837 [Handle]
Classification:	L11 - Production, Pricing, and Market Structure Size; Size Distribution of Firms ; D44 - Auctions ; L41 - Monopolization; Horizontal Anticompetitive Practices
Source:	EconStor

Persistent link: https://www.econbiz.de/10010261198