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Group Contests with Complementarities in Efforts

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  • Martin Kolmar
  • Hendrik Rommeswinkel

Abstract

Usually, groups increase their productivity by the specialization of their group members. In these cases, group output is no longer simply a sum of individual outputs. We analyze contests with group-specific public goods that allow for different degrees of complementarity between group members’ efforts. More specifically, we use a Tullock contest success function and a CES-impact function. We show that in equilibrium the degree of complementarity is irrelevant if groups do not differ in size and group members have an identical valuation of the public good. The equilibrium is discontinuous as the CES function converges to the Cobb-Douglas case. Except for the effects at the discontinuity, higher complementarity tends to favor larger groups. In groups with diverse valuations, higher complementarity also leads to higher similarity in group members’ efforts, which however is not necessarily an advantage for a more diverse group.

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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3136.

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Date of creation: 2010
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Handle: RePEc:ces:ceswps:_3136

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Related research

Keywords: contests; public goods;

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References

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  1. Garfinkel, Michelle R. & Skaperdas, Stergios, 2007. "Economics of Conflict: An Overview," Handbook of Defense Economics, Elsevier, Elsevier.
  2. Nitzan, Shmuel, 1991. "Collective Rent Dissipation," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 101(409), pages 1522-34, November.
  3. Johannes Münster, 2009. "Group contest success functions," Economic Theory, Springer, Springer, vol. 41(2), pages 345-357, November.
  4. Gil Epstein & Yosef Mealem, 2009. "Group specific public goods, orchestration of interest groups with free riding," Public Choice, Springer, Springer, vol. 139(3), pages 357-369, June.
  5. Arye L. Hillman & John G. Riley, 1987. "Politically Contestable Rents and Transfers," UCLA Economics Working Papers, UCLA Department of Economics 452, UCLA Department of Economics.
  6. Nitzan, Shmuel & Ueda, Kaoru, 2009. "Collective contests for commons and club goods," Journal of Public Economics, Elsevier, Elsevier, vol. 93(1-2), pages 48-55, February.
  7. Nitzan, Shmuel, 1991. " Rent-Seeking with Non-identical Sharing Rules," Public Choice, Springer, Springer, vol. 71(1-2), pages 43-50, August.
  8. Katz, Eliakim & Nitzan, Shmuel & Rosenberg, Jacob, 1990. " Rent-Seeking for Pure Public Goods," Public Choice, Springer, Springer, vol. 65(1), pages 49-60, April.
  9. Jack Hirshleifer, 1983. "From weakest-link to best-shot: The voluntary provision of public goods," Public Choice, Springer, Springer, vol. 41(3), pages 371-386, January.
  10. Stein, William E, 2002. " Asymmetric Rent-Seeking with More Than Two Contestants," Public Choice, Springer, Springer, vol. 113(3-4), pages 325-36, December.
  11. Richard Cornes & Roger Hartley, 2005. "Asymmetric contests with general technologies," Economic Theory, Springer, Springer, vol. 26(4), pages 923-946, November.
  12. Alchian, Armen A & Demsetz, Harold, 1972. "Production , Information Costs, and Economic Organization," American Economic Review, American Economic Association, American Economic Association, vol. 62(5), pages 777-95, December.
  13. Konrad, Kai A., 2009. "Strategy and Dynamics in Contests," OUP Catalogue, Oxford University Press, Oxford University Press, number 9780199549603, October.
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Cited by:
  1. May Elsayyad & Kai A. Konrad, 2010. "Fighting Multiple Tax Havens," CESifo Working Paper Series 3195, CESifo Group Munich.
  2. Subhasish M. Chowdhury & Dongryul Lee & Roman M. Sheremeta, 2011. "Top Guns May Not Fire: Best-Shot Group Contests with Group-Specific Public Good Prizes," University of East Anglia Applied and Financial Economics Working Paper Series, School of Economics, University of East Anglia, Norwich, UK. 024, School of Economics, University of East Anglia, Norwich, UK..
  3. Michael Funke & Yu-Fu Chen & Aaron Mehrota, 2011. "Global warming and extreme events: Rethinking the timing and intensity of environment policy," Quantitative Macroeconomics Working Papers, Hamburg University, Department of Economics 21105, Hamburg University, Department of Economics.
  4. Chen, Yu-Fu & Funke, Michael, 2010. "Global Warming And Extreme Events: Rethinking The Timing And Intensity Of Environmental Policy," SIRE Discussion Papers, Scottish Institute for Research in Economics (SIRE) 2010-48, Scottish Institute for Research in Economics (SIRE).

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