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Intra-Group Heterogeneity in Collective Contests

Author

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  • Shmuel Nitzan
  • Kaoru Ueda

Abstract

Collective contests are examined permitting heterogeneity of stakes within every competing group. Our first concern is whether unequal distribution of stakes in a group can enhance its win probability. Our second concern is whether a large stake in a group can be individually disadvantageous. We find that if a contest is sufficiently “hard” for a group, the answers to these questions are positive under plausible conditions. In such situations, monopoly of the private stake is most effective in enhancing the group’s performance. Ironically, in the same cases, the welfare of many group members would be negatively related to the size of their individual stake.

Suggested Citation

  • Shmuel Nitzan & Kaoru Ueda, 2013. "Intra-Group Heterogeneity in Collective Contests," CESifo Working Paper Series 4096, CESifo.
  • Handle: RePEc:ces:ceswps:_4096
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Brookins, Philip & Jindapon, Paan, 2021. "Risk preference heterogeneity in group contests," Journal of Mathematical Economics, Elsevier, vol. 95(C).
    2. Veselov, D. & Yarkin, A., 2016. "Wealth Distribution and Political Conflict in the Model of Transition from Stagnation to Growth," Journal of the New Economic Association, New Economic Association, vol. 32(4), pages 30-60.
    3. Francesco Trevisan, 2020. "Optimal prize allocations in group contests," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 55(3), pages 431-451, October.
    4. Philip Brookins & John P. Lightle & Dmitry Ryvkin, 2015. "The effects of communication and sorting on output in heterogeneous weak-link group contests," Working Papers wp2014_01_01, Department of Economics, Florida State University.
    5. Katsuya Kobayashi & Hideo Konishi, 2021. "Effort complementarity and sharing rules in group contests," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 56(2), pages 205-221, February.
    6. Mingye Ma & Francesco Trevisan, 2023. "An Experiment on Inequality within Groups in Contest," Working Papers 2023: 30, Department of Economics, University of Venice "Ca' Foscari".
    7. Aney, Madhav S. & Ko, Giovanni, 2015. "Expropriation risk and competition within the military," European Journal of Political Economy, Elsevier, vol. 39(C), pages 125-149.
    8. Brookins, Philip & Lightle, John P. & Ryvkin, Dmitry, 2018. "Sorting and communication in weak-link group contests," Journal of Economic Behavior & Organization, Elsevier, vol. 152(C), pages 64-80.
    9. Dhritiman Gupta, 2023. "Prize sharing rules in collective contests: when do social norms matter?," Review of Economic Design, Springer;Society for Economic Design, vol. 27(1), pages 221-244, February.
    10. Nieva, Ricardo, 2020. "A Tragic Solution to the Collective Action Problem: Implications for Corruption, Conflict and Inequality," FACTS: Firms And Cities Towards Sustainability 305207, Fondazione Eni Enrico Mattei (FEEM) > FACTS: Firms And Cities Towards Sustainability.
    11. Alex Dickson, 2017. "Multiple-aggregate games," Working Papers 1701, University of Strathclyde Business School, Department of Economics.
    12. Dmitriy Veselov & Alexander Yarkin, 2015. "The Great Divergence Revisited: Industrialization, Inequality and Political Conflict in the Unified Growth Model," HSE Working papers WP BRP 118/EC/2015, National Research University Higher School of Economics.
    13. Ricardo Nieva, 2020. "A Tragic Solution to the Collective Action Problem: Implications for Corruption, Con?flict and Inequality," Working Papers 2020.04, Fondazione Eni Enrico Mattei.

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    More about this item

    Keywords

    collective contest; intra-group heterogeneity; elasticity of marginal effort costs; unequal stakes and group performance; military alliance; 'exploitation of the large';
    All these keywords.

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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