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Multi-battle contests

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Listed:
  • Konrad, Kai A.
  • Kovenock, Dan

Abstract

We study equilibrium in a multistage race in which players compete in a sequence of simultaneous move component contests. Players may win a prize for winning each component contest, as well as a prize for winning the overall race. Each component contest is an all-pay auction with complete information. We characterize the unique equilibrium analytically and demonstrate that it exhibits endogenous uncertainty. Even a large lead by one player does not fully discourage the other player, and each feasible state is reached with positive probability in equilibrium (pervasiveness). Total effort may exceed the value of the prize by a factor that is proportional to the maximum number of stages. Important applications are to war, sports, and R&D contests and the results have empirical counterparts there.

Suggested Citation

  • Konrad, Kai A. & Kovenock, Dan, 2006. "Multi-battle contests," Purdue University Economics Working Papers 1187, Purdue University, Department of Economics.
    • Handle: RePEc:pur:prukra:1187
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    all-pay auction ; contest ; race ; conflict ; multi-stage ; R&D ; endogenous uncertainty ; preemption ; discouragement;
    All these keywords.

    JEL classification:

    • 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; Revolutions

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