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Contests with endogenous claims: Conflict dissipation

Author

Listed:
  • Cardona, Daniel
  • Claveria-Mayol, Marc
  • Ponsatí, Clara

Abstract

We examine a one-dimensional policy contest between two agents that takes place in two steps: first, agents choose policy proposals; then, they engage in a Tullock contest in which one of the proposals prevails. We show that there is a unique subgame perfect equilibrium (in undominated strategies), in which both contestants moderate their claims equally. When the contest is sufficiently competitive, proposals converge to the center, and conflict dissipates. Expected payoffs increase with the degree of competitiveness (up to an upper bound), while aggregate effort increases to a maximum and then decreases.

Suggested Citation

  • Cardona, Daniel & Claveria-Mayol, Marc & Ponsatí, Clara, 2025. "Contests with endogenous claims: Conflict dissipation," Economics Letters, Elsevier, vol. 256(C).
    • Handle: RePEc:eee:ecolet:v:256:y:2025:i:c:s0165176525004094
    DOI: 10.1016/j.econlet.2025.112572
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    References listed on IDEAS

    as
    1. Marco Sahm, 2022. "Optimal Accuracy of Unbiased Tullock Contests with Two Heterogeneous Players," CESifo Working Paper Series 9601, CESifo.
    2. Lu, Jingfeng & Wang, Zhewei & Zhou, Lixue, 2022. "Optimal favoritism in contests with identity-contingent prizes," Journal of Economic Behavior & Organization, Elsevier, vol. 196(C), pages 40-50.
    3. Ewerhart, Christian, 2017. "Revenue ranking of optimally biased contests: The case of two players," Economics Letters, Elsevier, vol. 157(C), pages 167-170.
    4. Feng, Xin & Lu, Jingfeng, 2017. "Uniqueness of equilibrium in two-player asymmetric Tullock contests with intermediate discriminatory power," Economics Letters, Elsevier, vol. 159(C), pages 61-64.
    5. Franke, Jörg & Kanzow, Christian & Leininger, Wolfgang & Schwartz, Alexandra, 2014. "Lottery versus all-pay auction contests: A revenue dominance theorem," Games and Economic Behavior, Elsevier, vol. 83(C), pages 116-126.
    6. Marco Sahm, 2022. "Optimal Accuracy of Unbiased Tullock Contests with Two Heterogeneous Players," Games, MDPI, vol. 13(2), pages 1-6, March.
    7. Epstein, Gil S. & Nitzan, Shmuel, 2004. "Strategic restraint in contests," European Economic Review, Elsevier, vol. 48(1), pages 201-210, February.
    8. Sahm, Marco, 2022. "Optimal accuracy of unbiased Tullock contests with two heterogeneous players," BERG Working Paper Series 175, Bamberg University, Bamberg Economic Research Group.
    9. Alcalde, José & Dahm, Matthias, 2010. "Rent seeking and rent dissipation: A neutrality result," Journal of Public Economics, Elsevier, vol. 94(1-2), pages 1-7, February.
    10. Kirkegaard, René, 2012. "Favoritism in asymmetric contests: Head starts and handicaps," Games and Economic Behavior, Elsevier, vol. 76(1), pages 226-248.
    11. Wang Zhewei, 2010. "The Optimal Accuracy Level in Asymmetric Contests," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 10(1), pages 1-18, April.
    12. Ewerhart, Christian, 2025. "On the uniqueness of the mixed equilibrium in the Tullock contest," Economics Letters, Elsevier, vol. 247(C).
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    Keywords

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    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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