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Top Guns May Not Fire: Best-Shot Group Contests with Group-Specific Public Good Prizes

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  • Chowdhury, Subhasish
  • Lee, Dongryul
  • Sheremeta, Roman

Abstract

We analyze a group contest in which n groups compete to win a group-specific public good prize. Group sizes can be different and any player may value the prize differently within and across groups. Players exert costly efforts simultaneously and independently. Only the highest effort (the best-shot) within each group represents the group effort that determines the winning group. We fully characterize the set of equilibria and show that in any equilibrium at most one player in each group exerts strictly positive effort. There always exists an equilibrium in which only the highest value player in each active group exerts strictly positive effort. However, perverse equilibria may exist in which the highest value players completely free-ride on others by exerting no effort. We provide conditions under which the set of equilibria can be restricted and discuss contest design implications.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 46654.

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Date of creation: 27 Apr 2013
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Handle: RePEc:pra:mprapa:46654

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Keywords: best-shot technology; group contest; group-specific public goods; free-riding;

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References

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  1. Cason, Timothy N. & Sheremeta, Roman M. & Zhang, Jingjing, 2012. "Communication and efficiency in competitive coordination games," Games and Economic Behavior, Elsevier, Elsevier, vol. 76(1), pages 26-43.
  2. Emmanuel Dechenaux & Dan Kovenock & Roman Sheremeta, 2012. "A Survey of Experimental Research on Contests, All-Pay Auctions and Tournaments," Working Papers, Chapman University, Economic Science Institute 12-22, Chapman University, Economic Science Institute.
  3. Martin Kolmar & Hendrik Rommeswinkel, 2010. "Group Contests with Complementarities in Efforts," CESifo Working Paper Series 3136, CESifo Group Munich.
  4. Ahn, T.K. & Isaac, R. Mark & Salmon, Timothy C., 2011. "Rent seeking in groups," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 29(1), pages 116-125, January.
  5. Roman Sheremeta, 2010. "Perfect-Substitutes, Best-Shot, and Weakest-Link Contests between Groups," Working Papers, Chapman University, Economic Science Institute 10-25, Chapman University, Economic Science Institute.
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  7. Deck, Cary & Sheremeta, Roman, 2012. "Fight or Flight?," MPRA Paper 52130, University Library of Munich, Germany.
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  9. Chowdhury, Subhasish M. & Sheremeta, Roman M., 2011. "Multiple equilibria in Tullock contests," Economics Letters, Elsevier, Elsevier, vol. 112(2), pages 216-219, August.
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  19. Stein, William E, 2002. " Asymmetric Rent-Seeking with More Than Two Contestants," Public Choice, Springer, Springer, vol. 113(3-4), pages 325-36, December.
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Citations

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Cited by:
  1. Cason, Timothy N. & Sheremeta, Roman M. & Zhang, Jingjing, 2012. "Communication and efficiency in competitive coordination games," Games and Economic Behavior, Elsevier, Elsevier, vol. 76(1), pages 26-43.
  2. Philip Brookins & John Lightle & Dmitry Ryvkin, 2014. "An experimental study of sorting in group contests," Working Papers, Department of Economics, Florida State University wp2014_01_01, Department of Economics, Florida State University.
  3. Stefano Barbieri & David Malueg, 2014. "Group efforts when performance is determined by the “best shot”," Economic Theory, Springer, Springer, vol. 56(2), pages 333-373, June.
  4. Subhasish M. Chowdhury & Iryna Topolyan, 2013. "The Attack-and-Defence Group Contests," University of East Anglia Applied and Financial Economics Working Paper Series, School of Economics, University of East Anglia, Norwich, UK. 049, School of Economics, University of East Anglia, Norwich, UK..
  5. Kolmar, Martin, 2013. "Group Conflicts. Where do we stand?," Economics Working Paper Series 1331, University of St. Gallen, School of Economics and Political Science.
  6. Subhasish M. Chowdhury & Dongryul Lee & Iryna Topolyan, 2013. "The Max-Min Group Contest," University of East Anglia Applied and Financial Economics Working Paper Series, School of Economics, University of East Anglia, Norwich, UK. 050, School of Economics, University of East Anglia, Norwich, UK..
  7. Jay Pil Choi & Subhasish M. Chowdhury & Jaesoo Kim, 2011. "Group Contests with Internal Conflict and Power Asymmetry," University of East Anglia Applied and Financial Economics Working Paper Series, School of Economics, University of East Anglia, Norwich, UK. 025, School of Economics, University of East Anglia, Norwich, UK..

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