Advanced Search
MyIDEAS: Login to save this paper or follow this series

Contests with Rank-Order Spillovers

Contents:

Author Info

  • Michael R. Baye

    (Indiana University)

  • Dan Kovenock

    (University of Iowa)

  • Casper G. de Vries

    (Erasmus University)

Abstract

This paper presents a unified framework for characterizing symmetric equilibrium in simultaneous move, two-player, rank-order contests with complete information, in which each player's strategy generates direct or indirect affine "spillover" effects that depend on the rank-order of her decision variable. These effects arise in natural interpretations of a number of important economic environments, as well as in classic contests adapted to recent experimental and behavioral models where individuals exhibit inequality aversion or regret. We provide the closed-form solution for the symmetric Nash equilibria of this class of games, and show how it can be used to directly solve for equilibrium behavior in auctions, pricing games, tournaments, R&D races, models of ligitation, and a host of other contests. This paper has been accepted by 'Economic Theory' .

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://papers.tinbergen.nl/09066.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 09-066/2.

as in new window
Length:
Date of creation: 28 Jul 2009
Date of revision:
Handle: RePEc:dgr:uvatin:20090066

Contact details of provider:
Web page: http://www.tinbergen.nl

Related research

Keywords: Contests; Auctions; Spillovers;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Ettinger, David, 2003. "Efficiency in auctions with crossholdings," Economics Papers from University Paris Dauphine 123456789/5448, Paris Dauphine University.
  2. Kai A. Konrad, 2003. "Inverse Campaigning," CESifo Working Paper Series 905, CESifo Group Munich.
  3. ehiel, Philippe & Benny Moldovanu & Ennio Stacchetti, 1994. "How (not) to sell nuclear weapons," Discussion Paper Serie B 288, University of Bonn, Germany.
  4. Baye, M.R. & Kovenock, D. & De Varies, C.G., 1990. "The All-Pay Auction With Complete Information," Papers 9051, Tilburg - Center for Economic Research.
  5. William Vickrey, 1961. "Counterspeculation, Auctions, And Competitive Sealed Tenders," Journal of Finance, American Finance Association, vol. 16(1), pages 8-37, 03.
  6. Baye, Michael R. & Kovenock, Dan & de Vries, Casper G., 1992. "It takes two to tango: Equilibria in a model of sales," Games and Economic Behavior, Elsevier, vol. 4(4), pages 493-510, October.
  7. Joseph E. Stiglitz & G. Frank Mathewson (ed.), 1986. "New Developments in the Analysis of Market Structure," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262690934, December.
  8. Baye, M.R. & Kovenock, D. & De Vries, C.G., 1991. "Rigging The Lobbying Process: An Application Of The All- Pay Auction," Purdue University Economics Working Papers 1002, Purdue University, Department of Economics.
  9. d'Aspremont, Claude & Jacquemin, Alexis, 1988. "Cooperative and Noncooperative R&D in Duopoly with Spillovers," American Economic Review, American Economic Association, vol. 78(5), pages 1133-37, December.
  10. Kaplan, T.R. & Luski, I. & Wettstein, D., 2000. "Innovative Activity and Sunk Cost," Papers 2000-6, Tel Aviv.
  11. Baye, M.R. & Kovenock, D., 1990. "How To Sell A Pickup Truck: "Beat-Or-Pay" Advertisements As Facilitating Devices," Papers 9053, Tilburg - Center for Economic Research.
  12. Yeon-Koo Che & Ian Gale, 1998. "Caps on Political Lobbying," Microeconomics 9809003, EconWPA.
  13. Richard Engelbrecht-Wiggans & Elena Katok, 2007. "Regret in auctions: theory and evidence," Economic Theory, Springer, vol. 33(1), pages 81-101, October.
  14. Michael R. Baye & Dan Kovenock & Casper G. Vries, 2005. "Comparative Analysis of Litigation Systems: An Auction-Theoretic Approach," Economic Journal, Royal Economic Society, vol. 115(505), pages 583-601, 07.
  15. Emiel Maasland & Sander Onderstal, 2007. "Auctions with Financial Externalities," Economic Theory, Springer, vol. 32(3), pages 551-574, September.
  16. Qiang Fu, 2006. "A Theory of Affirmative Action in College Admissions," Economic Inquiry, Western Economic Association International, vol. 44(3), pages 420-428, July.
  17. Rosenthal, Robert W, 1980. "A Model in Which an Increase in the Number of Sellers Leads to a Higher Price," Econometrica, Econometric Society, vol. 48(6), pages 1575-79, September.
  18. Yeon-Koo Che & Ian Gale, 2000. "Optimal Design of Research Contests," Econometric Society World Congress 2000 Contributed Papers 1784, Econometric Society.
  19. Arye L. Hillman & John G. Riley, 1989. "Politically Contestable Rents And Transfers," Economics and Politics, Wiley Blackwell, vol. 1(1), pages 17-39, 03.
  20. Lizzeri, Alessandro & Persico, Nicola, 2000. "Uniqueness and Existence of Equilibrium in Auctions with a Reserve Price," Games and Economic Behavior, Elsevier, vol. 30(1), pages 83-114, January.
  21. David Ettinger, 2003. "Efficiency in auctions with crossholdings," Post-Print hal-00702434, HAL.
  22. Kittsteiner, Thomas, 2000. "Partnerships and Double Auctions with Interdependent Valuations," Sonderforschungsbereich 504 Publications 01-15, Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim.
  23. John G. Riley & William Samuelson, 1979. "Optimal Auctions," UCLA Economics Working Papers 152, UCLA Department of Economics.
  24. Sudipto Dasgupta & Kevin Tsui, 2004. "Auctions with cross-shareholdings," Economic Theory, Springer, vol. 24(1), pages 163-194, 07.
  25. Christian Groh & Benny Moldovanu & Aner Sela & Uwe Sunde, 2012. "Optimal seedings in elimination tournaments," Economic Theory, Springer, vol. 49(1), pages 59-80, January.
  26. Varian, Hal R, 1980. "A Model of Sales," American Economic Review, American Economic Association, vol. 70(4), pages 651-59, September.
  27. Emel Filiz-Ozbay & Erkut Y. Ozbay, 2007. "Auctions with Anticipated Regret: Theory and Experiment," American Economic Review, American Economic Association, vol. 97(4), pages 1407-1418, September.
  28. Richard Engelbrecht-Wiggans, 1989. "The Effect of Regret on Optimal Bidding in Auctions," Management Science, INFORMS, vol. 35(6), pages 685-692, June.
  29. Baye, Michael R. & Morgan, John, 1999. "A folk theorem for one-shot Bertrand games," Economics Letters, Elsevier, vol. 65(1), pages 59-65, October.
  30. Hehenkamp, B. & Leininger, W. & Possajennikov, A., 2004. "Evolutionary equilibrium in Tullock contests: spite and overdissipation," European Journal of Political Economy, Elsevier, vol. 20(4), pages 1045-1057, November.
  31. Basu, Kaushik, 1994. "The Traveler's Dilemma: Paradoxes of Rationality in Game Theory," American Economic Review, American Economic Association, vol. 84(2), pages 391-95, May.
  32. Jacob K. Goeree & Emiel Maasland & Sander Onderstal & John L. Turner, 2005. "How (Not) to Raise Money," Journal of Political Economy, University of Chicago Press, vol. 113(4), pages 897-926, August.
  33. Haiwen Zhou, 2006. "R&D Tournaments with Spillovers," Atlantic Economic Journal, International Atlantic Economic Society, vol. 34(3), pages 327-339, September.
  34. Ettinger, David, 2003. "Efficiency in auctions with crossholdings," Economics Letters, Elsevier, vol. 80(1), pages 1-7, July.
  35. Nicolas Sahuguet & Nicola Persico, 2006. "Campaign spending regulation in a model of redistributive politics," Economic Theory, Springer, vol. 28(1), pages 95-124, 05.
  36. Png, I P L & Hirshleifer, D, 1987. "Price Discrimination through Offers to Match Price," The Journal of Business, University of Chicago Press, vol. 60(3), pages 365-83, July.
  37. Helsley, Robert W. & Strange, William C., 2008. "A game-theoretic analysis of skyscrapers," Journal of Urban Economics, Elsevier, vol. 64(1), pages 49-64, July.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Roman M. Sheremeta & Subhasish M. Chowdhury, 2014. "Strategically Equivalent Contests," Working Papers 14-06, Chapman University, Economic Science Institute.
  2. Subhasish M. Chowdhury & Roman M. Sheremeta, 2010. "A generalized Tullock contest," Working Papers 10-08, Chapman University, Economic Science Institute.
  3. Fehr, Dietmar & Schmid, Julia, 2010. "Exclusion in the all-pay auction: An experimental investigation," Discussion Papers, Research Unit: Market Behavior SP II 2010-04, Social Science Research Center Berlin (WZB).
  4. Michael R. Baye & Dan Kovenock J. & Casper De Vries, 2010. "The Herodotus Paradox," CESifo Working Paper Series 3135, CESifo Group Munich.
  5. Stefan Jönsson & Armin Schmutzler, 2013. "All-pay auctions: Implementation and optimality," ECON - Working Papers 108, Department of Economics - University of Zurich.
  6. Sela, Aner, 2009. "Best-of-Three All-Pay Auctions," CEPR Discussion Papers 7224, C.E.P.R. Discussion Papers.
  7. Segev, Ella & Sela, Aner, 2014. "Sequential all-pay auctions with noisy outputs," Journal of Mathematical Economics, Elsevier, vol. 50(C), pages 251-261.
  8. Rabia Nessah, 2013. "Weakly Continuous Security in Discontinuous and Nonquasiconcave Games: Existence and Characterization," Working Papers 2013-ECO-20, IESEG School of Management.
  9. Lu, Jingfeng, 2012. "Optimal auctions with asymmetric financial externalities," Games and Economic Behavior, Elsevier, vol. 74(2), pages 561-575.
  10. 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..
  11. Ella Segev & Aner Sela, 2011. "Sequential All-Pay Auctions with Head Starts and Noisy Outputs," Working Papers 1106, Ben-Gurion University of the Negev, Department of Economics.
  12. Gregor, Martin, 2012. "Contest for power in organizations," Economics Letters, Elsevier, vol. 114(3), pages 280-283.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:dgr:uvatin:20090066. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Antoine Maartens (+31 626 - 160 892)).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.