Abstract
We plan to compare first-price and all-pay auctions with two units sold, and observe the effect of focal points on bidding, revenue and efficiency. Specifically, we plan to conduct laboratory experiments, in which each session has 6 bidders drawing private values independently (for each period) and competing to win one of two prizes, with the second prize valued at a fraction (80%, 40%, 20% etc.) of the first prize. The risk neutral Bayesian Nash equilibrium (RNBNE) predicts revenue equivalence and both formats being efficient. However, experimental results would likely be affected by the fraction (80%, 40%, 20% etc.), becoming bidding focal points. If this occurs, the first-price auction would yield higher revenue compared to the all-pay auction, and have efficiency levels closer to 100%. In contrast, the single-unit, first-price auction does not have such focal points, and would likely result in lower (first-prize) revenue and efficiency than all-pay, since bidders tend to overbid in all-pay auctions.