Silent Interests and All-Pay Auctions

No 2005/8, Discussion Papers from Free University Berlin, School of Business & Economics

Abstract: If firms compete in all-pay auctions with complete information, silent shareholdings introduce asymmetric externalities into the allpay 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.

Keywords: all-pay auctions; externalities; contests; silent minority shareholdings; ownership structure (search for similar items in EconPapers)
JEL-codes: D44 L11 L41 (search for similar items in EconPapers)
Date: 2005
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Silent interests and all-pay auctions (2006)
Working Paper: Silent Interests and All-Pay Auctions (2005)
Working Paper: Silent interests and all-pay auctions (2005)
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