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Axiomatizing multi-prize nested lottery contests: A complete and strict ranking perspective

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  • Lu, Jingfeng
  • Wang, Zhewei

Abstract

Multiple prizes are usually awarded in contests (e.g., internal promotions, school admissions, sports, etc.) and players exert effort to increase their chances for winning a higher prize. A multi-prize contest model must provide each player's probabilities of winning each prize as functions of all players’ efforts. We find that the key notion of “hypothetical subcontests” in the contest axiomatization literature initiated by Skaperdas (1996) can be appropriately interpreted and precisely defined from a ranking perspective, as well as the relevant axioms of “Subcontest Consistency” and “Independence of Irrelevant Contestants” (IIC). When there are less than four contestants (exclusive), a set of axioms properly adapted from those in Skaperdas (1996) and Clark and Riis (1998a) are sufficient and necessary for axiomatizing the widely adopted multi-prize nested lottery contest of Clark and Riis (1996a). When there are more than four contestants (inclusive), including a new axiom of “Independence of Irrelevant Ranks” (IIR) is necessary and sufficient.

Suggested Citation

  • Lu, Jingfeng & Wang, Zhewei, 2015. "Axiomatizing multi-prize nested lottery contests: A complete and strict ranking perspective," Journal of Economic Behavior & Organization, Elsevier, vol. 116(C), pages 127-141.
  • Handle: RePEc:eee:jeborg:v:116:y:2015:i:c:p:127-141
    DOI: 10.1016/j.jebo.2015.04.010
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    References listed on IDEAS

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    Cited by:

    1. Jingfeng Lu & Zhewei Wang, 2016. "Axiomatization of reverse nested lottery contests," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 47(4), pages 939-957, December.
    2. Bozbay, Irem & Vesperoni, Alberto, 2018. "A contest success function for networks," Journal of Economic Behavior & Organization, Elsevier, vol. 150(C), pages 404-422.
    3. Christian Ewerhart, 2015. "Contest success functions: the common-pool perspective," ECON - Working Papers 195, Department of Economics - University of Zurich.
    4. Lu, Jingfeng & Shen, Bo & Wang, Zhewei, 2017. "Optimal contest design under reverse-lottery technology," Journal of Mathematical Economics, Elsevier, vol. 72(C), pages 25-35.
    5. Alberto Vesperoni & Anıl Yıldızparlak, 2019. "Inequality and conflict outbreak," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 53(1), pages 135-173, June.

    More about this item

    Keywords

    Multi-prize contest; Contest ranking function; Nested lottery contest; Independence from irrelevant contestants; Independence from irrelevant ranks;

    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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