All-pay effort identity 2026-10-06
Suppose values are nonnegative, the rank-order expected prize allocation is increasing and differentiable, and . With unit effort cost and zero effort at the lowest type, the symmetric equilibrium effort is . A true type imitating type receives utility , whose derivative in is . It increases up to and decreases afterwards, proving the best response property. This is the interim payment identity specialized to an all-pay contest.
Assume the usual continuous nonnegative valuation distribution, so ties occur only on zero-probability events. Put . In a monotone symmetric Bayesian Nash equilibrium, a type is first with probability and second with probability . Its rank-order expected prize allocation in is therefore
The all-pay effort identity gives . It also verifies equilibrium directly: a type imitating type has utility , whose derivative is , so the true type is a best response.
In the first version of , the two contests have expected allocations
There is no common effort budget, and quasilinear utility makes the two effort choices separable. Since , adding their all-pay effort identities yields
The equality holds type by type for aggregate effort, rather than only after taking expectations. The within-player correlation of the two efforts does not enter these additive expected payoffs.
For the second version of , let denote descending order statistics. The expected effort in a rank-order contest with prize vector is
Equivalently, decompose the allocation into a unit award to the best player and a unit award to each of the best two players, then use revenue equivalence: the corresponding total auction payments are and . Two separate first-place contests with prize values one and two instead generate
Consequently
For a nondegenerate continuous distribution, the inequality is strict. No regularity of virtual valuations is needed for this comparison. With a uniform distribution on , the two totals are and , giving a difference of .