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The Equivalence of Contests

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  • Subhasish M. Chowdhury

    () (School of Economics, University of East Anglia)

  • Roman M. Sheremeta

    () (Argyros School of Business and Economics, Chapman University)

Abstract

We use a Tullock-type contest model to show that intuitively and structurally different contests can be strategically and revenue equivalent to each other. We consider a two-player contest, where outcome-contingent payoffs are linear functions of prizes, own effort, and the effort of the rival. We identify strategically equivalent contests that generate the same family of best response functions and, as a result, the same revenue. However, two strategically equivalent contests may yield different equilibrium payoffs. Finally, we discuss possible contest design applications and avenues for future theoretical and empirical research.

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Bibliographic Info

Paper provided by Chapman University, Economic Science Institute in its series Working Papers with number 10-07.

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Length: 18 pages
Date of creation: Feb 2010
Date of revision:
Handle: RePEc:chu:wpaper:10-07

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Keywords: rent-seeking; contest; spillover; equivalence; revenue equivalence; contest design;

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References

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  1. Roman M. Sheremeta, 2009. "Experimental Comparison of Multi-Stage and One-Stage Contests," Working Papers 09-04, Chapman University, Economic Science Institute.
  2. Chung, Tai-Yeong, 1996. " Rent-Seeking Contest When the Prize Increases with Aggregate Efforts," Public Choice, Springer, vol. 87(1-2), pages 55-66, April.
  3. Subhasish Chowdhury & Roman Sheremeta, 2011. "A generalized Tullock contest," Public Choice, Springer, vol. 147(3), pages 413-420, June.
  4. Glazer, A. & Konrad, K.A., 1997. "Taxation of Rent-Seeking Activities," Papers 97-98-04, California Irvine - School of Social Sciences.
  5. Roman M. Sheremeta, 2011. "Contest Design: An Experimental Investigation," Economic Inquiry, Western Economic Association International, vol. 49(2), pages 573-590, 04.
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  17. Garfinkel, M.R. & Skaperdas, S., 2000. "Conflict without Misperceptions or Incomplete Information: how the Future Matters," Papers 99-00-11, California Irvine - School of Social Sciences.
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  20. Subhashish Modak Chowdhury & Roman M. Sheremeta, 2009. "A generalized Tullock contest and the existence of multiple equilibria," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 09-08, School of Economics, University of East Anglia, Norwich, UK..
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Cited by:
  1. Charness, Gary & Masclet, David & Villeval, Marie Claire, 2013. "The Dark Side of Competition for Status," University of California at Santa Barbara, Economics Working Paper Series qt3858888w, Department of Economics, UC Santa Barbara.

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