Agent Failures in All-Pay Auctions

Abstract

All-pay auctions, a common mechanism for various human and agent interactions, suffers, like many other mechanisms, from the possibility of players' failure to participate in the auction. We model such failures and show how they affect the equilibrium state, revealing various properties, such as the lack of influence of the most-likely-to-participate player on the behavior of the other players. We perform this analysis with two scenarios: the sum-profit model, where the auctioneer obtains the sum of all submitted bids, and the max-profit model of crowdsourcing contests, where the auctioneer can only use the best submissions and thus obtains only the winning bid. Furthermore, we examine various methods of influencing the probability of participation such as the effects of misreporting one's own probability of participating, and how influencing another player's participation chances (e.g., sabotage) changes the player's strategy.