Research On Strategies Of The Tenderee And Bidder Based On All-pay Auction Model

The research on traditional auction theory mainly focused on two aspects: bidding strategy of bidder and design of optimal auction mechanism of tenderee.Based on the bidder's angle,predecessors set up four kinds of equilibrium bidding model in the standard auction(Friedman model,Gates model,Hassman-Rivett model and Willenbrock model).Based on the tenderee's angle,predecessors obtained the revenue equivalence theorem and the method of setting the optimal reserve price in the standard auction.Researches of existing literatures on auction theory were mostly based on hypotheses of the SIPV model,but hypotheses of this model were too ideal and often didn't conform to the actual situation.For example,in actual auction,there were some problems such as unknown number of bidders,interrelated valuations of bidders and so on.In recent years,the all-pay auction had been widely applied to many fields that contain contradictions and competitions because of its important character called "all-pay",such as political campaign,competition,rent-seeking,enterprise competition and job promotion.Therefore,it is necessary and urgent to analyze and discuss the all-pay auction.In view of the above-mentioned problems,this paper used methods of the static game of incomplete information to study the strategy of the tenderee and bidder in all-pay auction.The main content and innovation of this paper were as follows:(1)This paper introduced the SIPV model,and on this basis,introduced the revenue equivalence theorem in the standard auction.(2)This paper proved that all-pay auction also satisfied the revenue equivalence theorem under the assumption of the SIPV model and expanded the scope of application of the revenue equivalence theorem.In order to solve the problem of unknown number of bidders in actual auction,this paper assumed that the number of bidders was a random variable obeying the Poisson distribution,and on this basis,obtained the equilibrium bidding function of the bidder and the expected revenue and the optimal reserve price of the tenderee in all-pay auction.(3)In order to solve the problem of the interrelated valuations of bidders in actual auction,this paper introduced the Milgrom-Weber model,and on this basis,obtained the equilibrium bidding function of the bidder in all-pay auction,and this paper further deduced the analytic expression of equilibrium bidding function.This paper extended the Milgrom-Weber model,and obtained the equilibrium bidding function of the bidder based on the random number of bidders in all-pay auction.This paper modified the traditional objective function of the bidder,introducing two parameters to reflect the bidder's preference for winning probability and net income,and this paper obtained the equilibrium bidding function of the bidder based on the modified objective function in all-pay auction.The research of this paper could better conform to the actual situation and provided a scientific reference for the tenderee and bidder to make decisions in actual auction.