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Contests with group-specific public goods and complementarities in efforts

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  • Kolmar, Martin
  • Rommeswinkel, Hendrik

Abstract

This paper starts from the observation that in public-goods group contests, group impact can in general not be additively decomposed into some sum (of functions) of individual efforts. We use a CES-impact function to identify the main channels of influence of the elasticity of substitution on the behavior in and the outcome of such a contest. We characterize the Nash equilibria of this game and carry out comparative-static exercises with respect to the elasticity of substitution among group members’ efforts. If groups are homogeneous (i.e. all group members have the same valuation and efficiency within the group), the elasticity of substitution has no effect on the equilibrium. For heterogeneous groups, the higher the complementarity of efforts of that group, the lower the divergence of efforts among group members and the lower the winning probability of that group. This contradicts the common intuition that groups can improve their performance by solving the free-rider problem via higher degrees of complementarity of efforts.

Suggested Citation

  • Kolmar, Martin & Rommeswinkel, Hendrik, 2013. "Contests with group-specific public goods and complementarities in efforts," Journal of Economic Behavior & Organization, Elsevier, vol. 89(C), pages 9-22.
  • Handle: RePEc:eee:jeborg:v:89:y:2013:i:c:p:9-22 DOI: 10.1016/j.jebo.2013.02.006
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    References listed on IDEAS

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    Cited by:

    1. Gregor, Martin, 2015. "Task divisions in teams with complementary tasks," Journal of Economic Behavior & Organization, Elsevier, vol. 117(C), pages 102-120.
    2. Subhasish M. Chowdhury & Iryna Topolyan, 2013. "The Attack-and-Defence Group Contests," University of East Anglia Applied and Financial Economics Working Paper Series 049, School of Economics, University of East Anglia, Norwich, UK..
    3. Subhasish M. Chowdhury & Dongryul Lee & Iryna Topolyan, 2013. "The Max-Min Group Contest," University of East Anglia Applied and Financial Economics Working Paper Series 050, School of Economics, University of East Anglia, Norwich, UK..
    4. Paul Pecorino, 2015. "Olson’s Logic of Collective Action at fifty," Public Choice, Springer, vol. 162(3), pages 243-262, March.
    5. Arye Hillman & Ngo Van Long, 2017. "The social cost of contestable benefits," CIRANO Working Papers 2017s-11, CIRANO.
    6. Brookins, Philip & Lightle, John P. & Ryvkin, Dmitry, 2015. "Optimal sorting in group contests with complementarities," Journal of Economic Behavior & Organization, Elsevier, vol. 112(C), pages 311-323.
    7. Arye L. Hillman & Ngo Van Long, 2017. "Rent Seeking: The Social Cost of Contestable Benefits," CESifo Working Paper Series 6462, CESifo Group Munich.
    8. Stefano Barbieri & David Malueg & Iryna Topolyan, 2014. "The best-shot all-pay (group) auction with complete information," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 57(3), pages 603-640, November.
    9. Jay Pil Choi & Subhasish M. Chowdhury & Jaesoo Kim, 2011. "Group Contests with Internal Conflict and Power Asymmetry," University of East Anglia Applied and Financial Economics Working Paper Series 025, School of Economics, University of East Anglia, Norwich, UK..
    10. Barbieri, Stefano & Malueg, David A., 2016. "Private-information group contests: Best-shot competition," Games and Economic Behavior, Elsevier, vol. 98(C), pages 219-234.
    11. Kolmar, Martin, 2013. "Group Conflicts. Where do we stand?," Economics Working Paper Series 1331, University of St. Gallen, School of Economics and Political Science.
    12. Dan Kovenock & Brian Roberson, 2010. "The Optimal Defense of Networks of Targets," Purdue University Economics Working Papers 1251, Purdue University, Department of Economics.
    13. Denter, Philipp & Morgan, John & Sisak, Dana, 2011. ""Where Ignorance is Bliss, 'tis Folly to be Wise": Transparency in Contests," Economics Working Paper Series 1128, University of St. Gallen, School of Economics and Political Science.
    14. Sheremeta, Roman, 2015. "Behavior in Group Contests: A Review of Experimental Research," MPRA Paper 67515, University Library of Munich, Germany.
    15. Luke Boosey & Philip Brookins & Dmitry Ryvkin, 2017. "Contests between groups of unknown size," Working Papers wp2017_03_01, Department of Economics, Florida State University.
    16. Cardona, Daniel & Rubí-Barceló, Antoni, 2016. "Group-contests with endogenous claims," European Journal of Political Economy, Elsevier, vol. 44(C), pages 97-111.
    17. Shmuel Nitzan & Kaoru Ueda, 2014. "Cost Sharing in Collective Contests," CESifo Working Paper Series 4825, CESifo Group Munich.
    18. Subhasish M. Chowdhury & Iryna Topolyan, 2016. "Best-shot versus weakest-link in political lobbying: an application of group all-pay auction," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 47(4), pages 959-971, December.
    19. Dasgupta, Indraneel & Neogi, Ranajoy Guha, 2017. "Between-Group Contests over Group-Specific Public Goods with Within-Group Fragmentation," IZA Discussion Papers 10881, Institute for the Study of Labor (IZA).
    20. Subhasish M. Chowdhury & Iryna Topolyan, 2015. "The Group All-Pay Auction with Heterogeneous Impact Functions," University of East Anglia Applied and Financial Economics Working Paper Series 069, School of Economics, University of East Anglia, Norwich, UK..
    21. repec:elg:eechap:15325_6 is not listed on IDEAS
    22. Bakshi, Dripto & Dasgupta, Indraneel, 2016. "Identity Conflict with Cross-Border Spillovers," IZA Discussion Papers 9731, Institute for the Study of Labor (IZA).
    23. Barbieri, Stefano, 2017. "Voluntary public good provision with private information using order statistics," Economics Letters, Elsevier, vol. 150(C), pages 63-66.
    24. Czyżewski, Bazyli, 2016. "Political Rents of European Farmers in the Sustainable Development Paradigm. International, national and regional perspective," MPRA Paper 74253, University Library of Munich, Germany.
    25. Alex Dickson, 2017. "Multiple-aggregate games," Working Papers 1701, University of Strathclyde Business School, Department of Economics.

    More about this item

    Keywords

    Contests; Public Goods; Complementarities;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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