A problem of Parallel Contests is raised and modeled. The equilibria in final situations of parallel contests are analyzed and characterized and the behaviours of contestants with different abilities’ parameters are explained. Given that the values of the prizes in the two contests are different, in equilibrium a group of strong players prefer entering into the contest with a higher prize. However, except the group of stronger ones, in equilibrium others will enter into both contests because they obtain equal expected revenue from the two contests, though these weak ones do not have equal probabilities to enter into the two parallel contests. Under the condition of rationalizability, this paper characterizes the respective distributions of contestants’ abilities in the two parallel contests, proves the existence of the equilibrium in parallel contests and completes the analysis of the parallel contests from the perspective of contestants.
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Paper provided by Thurgauer Wirtschaftsinstitut, Universität Konstanz in its series TWI Research Paper Series with number
36.