The lifeboat problem
AbstractWe study an all-pay contest with multiple identical prizes (lifeboat seats). Prizes are partitioned into subsets of prizes (lifeboats). Players play a two-stage game. First, each player chooses an element of the partition (a lifeboat). Then each player competes for a prize in the subset chosen (a seat). We characterize and compare the subgame perfect equilibria in which all players employ pure strategies or all players play identical mixed strategies in the first stage. We find that the partitioning of prizes allows for coordination failure among players when they play nondegenerate mixed strategies and this can shelter rents and reduce rent dissipation compared to some of the less efficient pure strategy equilibria. --
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Bibliographic InfoPaper provided by Social Science Research Center Berlin (WZB) in its series Discussion Papers, Research Professorship & Project "The Future of Fiscal Federalism" with number SP II 2011-106.
Date of creation: 2011
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All-pay contest; multiple prizes; rent dissipation; lifeboat;
Other versions of this item:
- Konrad, Kai A. & Kovenock, Dan, 2009. "The Lifeboat Problem," CEPR Discussion Papers 7424, C.E.P.R. Discussion Papers.
- Konrad, Kai A. & Kovenock, Dan, 2012. "The lifeboat problem," Munich Reprints in Economics 13962, University of Munich, Department of Economics.
- Kai A. Konrad & Dan Kovenock, 2011. "The Lifeboat Problem," Working Papers the_lifeboat_problem, Max Planck Institute for Tax Law and Public Finance.
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-01-25 (All new papers)
- NEP-GTH-2012-01-25 (Game Theory)
- NEP-HPE-2012-01-25 (History & Philosophy of Economics)
- NEP-MIC-2012-01-25 (Microeconomics)
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