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Bidding in hierarchies

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  • Konrad, Kai A.

Abstract

This paper reconsiders the comparison between hierarchical contests and single-stage contests. A condition is given that characterizes whether and when the aggregate equilibrium payoff of contestants is higher in the single-stage contest, and when the single-stage contest is more likely to award the prize to the contestant who values it most highly. The outcome depends on inter- and intra-group heterogeneity, and is not driven by free-rider incentives.
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  • Konrad, Kai A., 2004. "Bidding in hierarchies," European Economic Review, Elsevier, vol. 48(6), pages 1301-1308, December.
  • Handle: RePEc:eee:eecrev:v:48:y:2004:i:6:p:1301-1308
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    More about this item

    JEL classification:

    • 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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