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Winner-leave versus loser-leave in multi-stage nested Tullock contests

Author

Listed:
  • Lu, Jingfeng
  • Lu, Yuanzhu
  • Wang, Zhewei
  • Zhou, Lixue

Abstract

This paper compares two procedures for allocating a sequence of fixed prizes in multi-stage nested Tullock contests. In a winner-leave (loser-leave) procedure, in each stage, the prizes of the stage are allocated to winners (losers) according to their ranks, and prizes in early stages are higher (lower) than those in later stages. Players who obtain prizes leave the contest and the others proceed to the next stage of competition. For both procedures, it is effort-maximizing to allocate one prize in each stage. Provided that the positive prizes in the sequence are homogeneous, the optimally designed loser-leave procedure generates higher total effort if and only if the number of positive prizes is lower than a threshold. If the positive prizes in the sequence are heterogeneous, then the loser-leave procedure may generate higher total effort, even if the number of positive prizes in the sequence is in the high range.

Suggested Citation

  • Lu, Jingfeng & Lu, Yuanzhu & Wang, Zhewei & Zhou, Lixue, 2022. "Winner-leave versus loser-leave in multi-stage nested Tullock contests," Games and Economic Behavior, Elsevier, vol. 132(C), pages 337-352.
    • Handle: RePEc:eee:gamebe:v:132:y:2022:i:c:p:337-352
    DOI: 10.1016/j.geb.2022.01.004
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    References listed on IDEAS

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    Cited by:

    1. Fu, Qiang & Wu, Zenan & Zhu, Yuxuan, 2023. "On equilibrium uniqueness in generalized multi-prize nested lottery contests," Games and Economic Behavior, Elsevier, vol. 139(C), pages 180-199.

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    More about this item

    Keywords

    Effort maximization; Loser-leave; Winner-leave; Multi-stage; Tullock contests;
    All these keywords.

    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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