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The Equivalence of Contests

Author

Listed:
  • Subhasish Modak Chowdhury

    (Centre for Competition Policy, School of Economics and Centre for Behavioural and Experimental Social Sciences, University of East Anglia)

  • Roman M Sheremeta

    (Argyros School of Business and Economics, Chapman University)

Abstract

We use a Tullock-type contest model to show that intuitively and structurally different contests can be strategically and revenue equivalent to each other. We consider a two-player contest, where outcome-contingent payoffs are linear functions of prizes, own effort, and the effort of the rival. We identify strategically equivalent contests that generate the same family of best response functions and, as a result, the same revenue. However, two strategically equivalent contests may yield different equilibrium payoffs. Finally, we discuss possible contest design applications and avenues for future theoretical and empirical research.

Suggested Citation

  • Subhasish Modak Chowdhury & Roman M Sheremeta, 2010. "The Equivalence of Contests," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2010-05, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    • Handle: RePEc:uea:ueaccp:2010_05
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    Cited by:

    1. Gary Charness & David Masclet & Marie Claire Villeval, 2014. "The Dark Side of Competition for Status," Management Science, INFORMS, vol. 60(1), pages 38-55, January.
    2. David Masclet & Clemens Puppe, 2015. "Introduction to the special issue “Experiments on conflicts and conflict resolution”," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 45(3), pages 479-488, October.
    3. Gary Charness & David Masclet & Marie Claire Villeval, 2014. "The Dark Side of Competition for Status (preprint)," Working Papers halshs-01090241, HAL.

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    More about this item

    Keywords

    rent-seeking; contest; spillover; equivalence; revenue equivalence; contest design.;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • 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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