A tractable group all-pay auction

Abstract

We consider group all-pay auctions with a wide range of effort complementarity in which teammates coordinate efforts via a group-specific correlation device. Under mild regularity conditions, there is a unique equilibrium effort distribution, independent of the distribution of the correlation device. We characterize this unique distribution of efforts and analyze the effects of value dispersion, degree of complementarity, and group size. We show that this effort distribution can be achieved without correlation devices as the equilibrium outcome of a cheap talk game in which players engage in costless unmediated preplay communication.