Top Guns May Not Fire: Best-Shot Group Contests with Group-Specific Public Good Prizes
AbstractWe analyze a group contest in which n groups compete to win a group-specific public good prize. Group sizes can be different and any individual player may value the prize differently within and across groups. Players expend costly efforts simultaneously and independently. Only the highest effort (the best-shot) within each group represents the group effort and the winning group is determined by a contest success function. 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 expends positive effort and the contest is reduced to an individual contest between individual players. However, there may also be equilibria in which the highest value players completely free ride on others by exerting no effort. We provide conditions under which this can be avoided and discuss contest design implications.
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Bibliographic InfoPaper provided by School of Economics, University of East Anglia, Norwich, UK. in its series University of East Anglia Applied and Financial Economics Working Paper Series with number 024.
Date of creation: 15 Mar 2011
Date of revision:
Postal: Helen Chapman, School of Economics, University of East Anglia, Norwich Research Park, Norwich, NR4 7TJ, UK
Other versions of this item:
- Subhasish M. Chowdhury & Dongryul Lee & Roman M. Sheremeta, 2013. "Top Guns May Not Fire: Best-Shot Group Contests with Group-Specific Public Good Prizes," Working Papers 13-12, Chapman University, Economic Science Institute.
- Chowdhury, Subhasish & Lee, Dongryul & Sheremeta, Roman, 2013. "Top Guns May Not Fire: Best-Shot Group Contests with Group-Specific Public Good Prizes," MPRA Paper 46654, University Library of Munich, Germany.
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-03-26 (All new papers)
- NEP-CBE-2011-03-26 (Cognitive & Behavioural Economics)
- NEP-GTH-2011-03-26 (Game Theory)
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