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Prize Sharing in Collective Contests

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  • Shmuel Nitzan

    ()
    (Bar-Ilan University)

  • Kaoru Ueda

    (Nanzan University)

Abstract

The characteristics of endogenously determined sharing rules and the group-size paradox are studied in a model of group contest with the following features: (i) The prize has mixed private-public good characteristics. (ii) Groups can differ in marginal cost of effort and their membership size. (iii) In each group the members decide how much effort to put without observing the sharing rules of the other groups. We provide simple characterizations of the relationship between group characteristics, performance of the competing groups (winning probability and per capita expected utility) and the type of sharing rules they select. Interestingly, richer and more efficient groups or groups with larger valuation of the prize tend to be more equalitarian. We also clarify under what circumstances such tendency is due to larger membership.

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Bibliographic Info

Paper provided by Department of Economics, Bar-Ilan University in its series Working Papers with number 2010-08.

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Date of creation: Apr 2010
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Handle: RePEc:biu:wpaper:2010-08

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Keywords: Collective contest; mixed public-good prize; endogenous sharing rules; the group-size paradox;

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References

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  1. Wärneryd, Karl, 1997. "Distributional Conflict and Jurisdictional Organization," Working Paper Series in Economics and Finance 173, Stockholm School of Economics.
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  8. Cornes, Richard & Hartley, Roger, 2003. " Risk Aversion, Heterogeneity and Contests," Public Choice, Springer, vol. 117(1-2), pages 1-25, October.
  9. Konrad, Kai A., 2009. "Strategy and Dynamics in Contests," OUP Catalogue, Oxford University Press, number 9780199549603.
  10. Nitzan, Shmuel & Ueda, Kaoru, 2009. "Collective contests for commons and club goods," Journal of Public Economics, Elsevier, vol. 93(1-2), pages 48-55, February.
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Citations

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Cited by:
  1. Junichiro Ishida, 2013. "Multilayered Tournaments," ISER Discussion Paper 0879, Institute of Social and Economic Research, Osaka University.
  2. Heinrich Ursprung, 2012. "The evolution of sharing rules in rent seeking contests: Incentives crowd out cooperation," Public Choice, Springer, vol. 153(1), pages 149-161, October.
  3. Jingjing Zhang, 2012. "Communication in asymmetric group competition over public goods," ECON - Working Papers 069, Department of Economics - University of Zurich.
  4. Shmuel Nitzan & Kaoru Ueda, 2014. "Cost Sharing in Collective Contests," CESifo Working Paper Series 4825, CESifo Group Munich.
  5. David K Levine & Salvatore Modica, 2013. "Peer Discipline and the Strength of Organizations," Levine's Bibliography 786969000000000713, UCLA Department of Economics.
  6. Shmuel Nitzan & Kaoru Ueda, 2013. "Intra-Group Heterogeneity in Collective Contests," CESifo Working Paper Series 4096, CESifo Group Munich.

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