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Contests for shares of an uncertain resource

Author

Listed:
  • Deck, Cary
  • Howe, E. Lance
  • Reimer, Matthew
  • Alevy, Jonathan
  • Borash, Kyle

Abstract

The process of allocating rights to resources can be viewed as a contest: parties compete with each other for the right to claim a larger allocation. In some situations, the amount of the resource that is available to allocate may be unknown when parties are competing for shares and perhaps not realized until contestants actually attempt to claim their shares of the resource. For example, fishing quotas may be awarded based on estimated fish populations, but if there are fewer fish than anticipated, those who are last to harvest may not be able to fill their quota. We model contests of this form and test the predictions of the model using a controlled laboratory experiment. The general result, supported by both theory and experimental data, is that participants compete less intensively for shares of the resource when uncertainty regarding the size of the prize is resolved later in the process.

Suggested Citation

  • Deck, Cary & Howe, E. Lance & Reimer, Matthew & Alevy, Jonathan & Borash, Kyle, 2021. "Contests for shares of an uncertain resource," Journal of Environmental Economics and Management, Elsevier, vol. 107(C).
    • Handle: RePEc:eee:jeeman:v:107:y:2021:i:c:s0095069621000127
    DOI: 10.1016/j.jeem.2021.102429
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    More about this item

    Keywords

    Contests with uncertain prizes; Fisheries; Experimental economics;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation

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