This paper introduces a class of contest models in which each player decides when to stop a privately observed Brownian motion with drift and incurs costs depending on his stopping time. The player who stops his process at the highest value wins a prize. We prove existence and uniqueness of a...

We show that jump bids can be used by a bidder to create a winner's curse and preserve an informational advantage that would otherwise disappear in the course of an open ascending auction. The eect of the winner's curse is to create allocative distortions and reduce the seller's expected...

Promoting competition among electricity producers is crucial for ensuring allocative efficiency and lower electricity prices. In this paper, I empirically examine the electricity market of England and Wales in order to analyze to what extent the regulatory reforms were successful in promoting...

We show that the commitment to not allocate may be exploited by a seller/social planner to increase the expected social surplus that can be achieved in the sale of an indivisible unit.

We show that open ascending auctions are prone to inecient rushes, i.e. all bidders quitting at the same price, in market environments such as privatizations, takeover contests, and procurement auctions. Rushes arise when an incumbent with better information about a common value component of the...

We analyze the rationale for hiding information in open auction formats. In particular, we focus on the incentives for a bidder to call a price higher than the highest standing one in order to prevent the remaining active bidders from aggregating more accurate information that could be gathered...

Does the type of post-auction feedback affect bidding behavior in first price auctions? Filiz- Ozbay and Ozbay (2007) find that such manipulation can increase bids in a one-shot auction. They explain this as an effect of anticipated regret combined with the assumption that feedback directly...

Promoting competition among electricity producers is primarily targeted at ensuring low electricity prices for consumers. Producers could, however, withhold part of production facilities (i.e., apply a capacity cutting strategy) and thereby push more expensive production facilities to satisfy...

This paper empirically analyzes how performance feedback and information on heterogeneity affect behavior in dynamic contests, using data on two-player-contests from a smartphone/tablet application called ``Wordblitz for Friends''. We find that players increase output as underdogs and decrease...

We study for a sample of international mergers and acquisitions the effectiveness of three takeover bidding strategies first in preventing bidder contests and second, if a contest has occurred, in increasing the probability of a successful offer. Our results indicate that support for the...