This paper analyzes the effects of a bid cap in an all-pay auction with incomplete information. I find that a non-trivial bid cap affects an agent’s expected payment in three ways: An “anti-competition effect” which is associated with this agent’s own signal, a pro-competitive “good news ef...detailed
We study the effect of rigid and flexible bid caps on contestants' aggregate costs and aggregate bids in all-pay contests with a large number of heterogeneous contestants and prizes.We show that rigid caps always decrease aggregate costs, whereas flexible caps have essentially no effect on ...detailed
We consider a network pricing game on a parallel network with congestion effects in which link owners set tolls for travel so as to maximize profit. A central authority is able to regulate this competition by means of a (uniform) price cap. The first question we want to answer is how such a cap ...detailed