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Biasing dynamic contests between ex-ante symmetric players

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  • Barbieri, Stefano
  • Serena, Marco

Abstract

We consider a best-of-three Tullock contest between two ex-ante symmetric players. An effort-maximizing designer commits to a vector of three biases (advantages or disadvantages), one per match. When the designer can choose victory-dependent biases (i.e., biases that depend on the record of matches won by players), the effort-maximizing biases eliminate the momentum effect, leaving players equally likely to win each match and the overall contest. Instead, when the designer can only choose victory-independent biases, the effort-maximizing biases alternate advantages in the first two matches and leave players not equally likely to win the overall contest. Therefore, in an optimal victory-independent contest, ex-ante symmetric players need not be treated identically, though a coin flip may restore ex-ante symmetry. We analyze several extensions of our basic model, including generalized Tullock contests, ex-ante asymmetric players, best-of-five contests, and winner's effort maximization.

Suggested Citation

  • Barbieri, Stefano & Serena, Marco, 2022. "Biasing dynamic contests between ex-ante symmetric players," Games and Economic Behavior, Elsevier, vol. 136(C), pages 1-30.
    • Handle: RePEc:eee:gamebe:v:136:y:2022:i:c:p:1-30
    DOI: 10.1016/j.geb.2022.07.005
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    More about this item

    Keywords

    Dynamic contests; Bias; Momentum effect;
    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
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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