In a recent paper, Baye, Kovenock, and de Vries (1993) derive a general formula for the seller’s expected revenue in an all-pay auction, where the buyers’ valuations are common knowledge.
Anecdotal evidence of concern about the limited financial resources of small firms abounds in government auctions. Recent empirical work also provides evidence of the importance of capital constraints.
In late July 1994, the Federal Communications Commission (FCC) began an unprecedented sale of the airwaves. Large segments of radio spectrum (frequencies) were sold in a series of auctions, enabling firms to provide new telecommunications services.