The Equivalence of Contests
AbstractWe 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 InfoPaper provided by Chapman University, Economic Science Institute in its series Working Papers with number 10-07.
Length: 18 pages
Date of creation: Feb 2010
Date of revision:
rent-seeking; contest; spillover; equivalence; revenue equivalence; contest design;
Other versions of this item:
- Subhashish Modak Chowdhury & Roman M. Sheremeta, 2009. "The equivalence of contests," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 09-06, School of Economics, University of East Anglia, Norwich, UK..
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-06-11 (All new papers)
- NEP-CDM-2010-06-11 (Collective Decision-Making)
- NEP-GTH-2010-06-11 (Game Theory)
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