Template-Type: ReDIF-Paper 1.0
Author-Name: Dietmar Fehr
Author-X-Name-First: Dietmar 
Author-X-Name-Last: Fehr
Author-Name: Julia Schmid
Author-X-Name-First: Julia 
Author-X-Name-Last: Schmid
Title: Exclusion in the All-Pay Auction: An Experimental Investigation
Abstract: Contest or auction designers who want to maximize the overall revenue are frequently con-
cerned with a trade-off between contest homogeneity and inclusion of contestants with high
valuations. In our experimental study, we find that it is not profitable to exclude the most
able contestant in favor of greater homogeneity among the remaining contestants, even if the
theoretical exclusion principle predicts otherwise. This is because the strongest contestants con-
siderably overexert. A possible explanation is that these contestants are afraid they will regret
a low but risky bid if they lose and thus prefer a strategy which gives them a low but secure
pay-off.
Length: 32 pages
Creation-Date:  2011-02
File-URL: http://sfb649.wiwi.hu-berlin.de/papers/pdf/SFB649DP2011-009.pdf
File-Format: Application/pdf
Number: SFB649DP2011-009
Classification-JEL: C72, C92, D84
Keywords: experiments, contests, all-pay auction, heterogeneity, regret aversion
Handle: RePEc:hum:wpaper:SFB649DP2011-009