Please use this identifier to cite or link to this item:
Title: Competitive effect of cross-shareholdings in all-pay auctions with complete information
Authors: Fu, Q. 
Lu, J.
Keywords: All-pay auction
Asymmetric bidders
Effort supply
Virtual bidding costs
Issue Date: May-2013
Citation: Fu, Q., Lu, J. (2013-05). Competitive effect of cross-shareholdings in all-pay auctions with complete information. International Journal of Industrial Organization 31 (3) : 267-277. ScholarBank@NUS Repository.
Abstract: This paper investigates the competitive effect of cross-shareholdings in winner-take-all all-pay auctions with two asymmetric bidders. We show that cross-shareholdings may paradoxically create a "pro-competitive" effect and elicit more effort than a standard contest without cross-ownership. This observation runs in contrast to the anti-competitive effect that cross-shareholdings usually create in standard oligopolistic settings (such as Cournot or Bertrand competitions). Both bidding costs and the sizes of cross-shares affect the resultant total effort non-monotonically. Neither a cross-share nor a higher bidding cost necessarily decreases effort supply. A complete account of equilibrium bidding behaviors is provided and the necessary and sufficient conditions under which cross-shareholdings lead to higher or lower levels of overall effort are identified. However, the pro-competitive effect comes at a loss of efficiency. © 2012 Elsevier B.V. All rights reserved.
Source Title: International Journal of Industrial Organization
ISSN: 01677187
DOI: 10.1016/j.ijindorg.2012.02.004
Appears in Collections:Staff Publications

Show full item record
Files in This Item:
There are no files associated with this item.


checked on Dec 12, 2018


checked on Dec 12, 2018

Page view(s)

checked on Nov 23, 2018

Google ScholarTM



Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.