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The lifeboat problem

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  • Konrad, Kai A.
  • Kovenock, Dan

Abstract

We study an all-pay contest with multiple identical prizes (“lifeboat seats”). Prizes are partitioned into subsets of prizes (“lifeboats”). Players play a two-stage game. First, each player chooses an element of the partition (“a lifeboat”). Then each player competes for a prize in the subset chosen (“a seat”). We characterize and compare the subgame perfect equilibria in which all players employ pure strategies or all players play identical mixed strategies in the first stage. The partitioning of prizes can lead to coordination failure when players employ nondegenerate mixed strategies. In these equilibria some rents are sheltered and rent dissipation is reduced.

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Bibliographic Info

Article provided by Elsevier in its journal European Economic Review.

Volume (Year): 56 (2012)
Issue (Month): 3 ()
Pages: 552-559

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Handle: RePEc:eee:eecrev:v:56:y:2012:i:3:p:552-559

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Web page: http://www.elsevier.com/locate/eer

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Keywords: All-pay contest; Multiple prizes; Rent dissipation; Lifeboat;

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Cited by:
  1. John Morgan & Dana Sisak & Felix Vardy, 2012. "On the Merits of Meritocracy," Tinbergen Institute Discussion Papers 12-077/1, Tinbergen Institute.
  2. Kai Konrad, 2012. "Information alliances in contests with budget limits," Public Choice, Springer, vol. 151(3), pages 679-693, June.

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