Disclosure Policies in All-pay Auctions with Endogenous Entry

Abstract

This paper examines the effects of disclosing the actual number of bidders in contests with endogenous stochastic entry. I study a standard all-pay auction in which bidders' valuations are commonly known but their participation decisions private. Each potential bidder has to incur an entry cost in order to participate in the auction. It is found that fully concealing the information about the number of participating bidders elicits a higher expected revenue than fully revealing the information if and only if the bidders differ too much in the net gain from winning. In addition, the revenue ranking on disclosure policies varies across the settings with one-sided exogenous entry, one-sided entry cost, and one-sided endogenous entry.