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Incentives in lottery contests with draws

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  • Deng, Shanglyu
  • Wang, Xiruo
  • Wu, Zenan

Abstract

We investigate the incentive consequences of introducing the possibility of draws into lottery contests. Equilibrium total effort unambiguously decreases when draws are introduced, whereas the equilibrium expected winner’s effort increases when the contestants’ valuations of the prize become sufficiently dispersed.

Suggested Citation

  • Deng, Shanglyu & Wang, Xiruo & Wu, Zenan, 2018. "Incentives in lottery contests with draws," Economics Letters, Elsevier, vol. 163(C), pages 1-5.
    • Handle: RePEc:eee:ecolet:v:163:y:2018:i:c:p:1-5
    DOI: 10.1016/j.econlet.2017.11.028
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    References listed on IDEAS

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    7. Lorens Imhof & Matthias Kräkel, 2016. "Ex post unbalanced tournaments," RAND Journal of Economics, RAND Corporation, vol. 47(1), pages 73-98, February.
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    9. Hao Jia, 2012. "Contests with the Probability of a Draw: A Stochastic Foundation," The Economic Record, The Economic Society of Australia, vol. 88(282), pages 391-406, September.
    10. Baye, Michael R. & Hoppe, Heidrun C., 2003. "The strategic equivalence of rent-seeking, innovation, and patent-race games," Games and Economic Behavior, Elsevier, vol. 44(2), pages 217-226, August.
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    Citations

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    Cited by:

    1. Li, Bo & Wu, Zenan & Xing, Zeyu, 2023. "Optimally biased contests with draws," Economics Letters, Elsevier, vol. 226(C).
    2. Goel, Sumit & Goyal, Amit, 2023. "Optimal tie-breaking rules," Journal of Mathematical Economics, Elsevier, vol. 108(C).
    3. Barbieri, Stefano & Serena, Marco, 2021. "Winner’s effort maximization in large contests," Journal of Mathematical Economics, Elsevier, vol. 96(C).
    4. Yizhaq Minchuk, 2022. "Winner‐pay contests with a no‐winner possibility," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(6), pages 1874-1879, September.
    5. Aner Sela, 2022. "Ineffective Prizes In Multi-Dimensional Contests," Working Papers 2205, Ben-Gurion University of the Negev, Department of Economics.
    6. Franke, Jörg & Metzger, Lars P., 2023. "Repeated Contests with Draws," Ruhr Economic Papers 1016, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    7. Leppälä, Samuli, 2021. "A partially exclusive rent-seeking contest," Journal of Economic Behavior & Organization, Elsevier, vol. 187(C), pages 60-75.

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    More about this item

    Keywords

    Contest; Draw;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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