CentralNotice All-pay auction From Wikipedia, the free encyclopedia Jump to: navigation , search In economics and game theory , an all-pay auction is an auction in which every bidder must pay regardless of whether he wins the prize, which is awarded to the highest bidder as in a conventional auction. In an all-pay auction, the Nash Equilibrium is such that each bidder plays a mixed strategy and his expected pay-off is zero. [ citation needed ] The seller's expected revenue is equal to the value of the prize. However, some experiments have shown that over-bidding is common. That is, the seller's revenue frequently exceeds that of the value of the prize, and in repeated games even bidders that win the prize frequently will most likely make a loss in the long run. [ 1 ] Forms of all-pay auctions [ edit ] The most straightforward form of an all-pay auction is a Tullock auct...