Intra-Group Heterogeneity in Collective Contests
AbstractCollective 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.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 4096.
Date of creation: 2013
Date of revision:
collective contest; intra-group heterogeneity; elasticity of marginal effort costs; unequal stakes and group performance; military alliance; ‘exploitation of the large’;
Find related papers by 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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