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Sad-Loser contests

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  • Matros, Alexander

Abstract

We consider asymmetric winner-reimbursed contests. It turns out that such contests (Sad-Loser) have multiple internal pure-strategy equilibria (where at least two players are active). We describe all equilibria and discuss their properties. In particular, we find (1) that an active player is indifferent among all her non-negative choices and her expected payoff is zero in any internal equilibrium, (2) that a higher-value (stronger) player always spends less than a lower-value (weaker) player and therefore always has a lower chance to win a Sad-Loser contest in any internal equilibrium, and (3) a sufficient condition for a net total spending to be higher in a Sad-Loser contest than in the corresponding asymmetric contest.

Suggested Citation

  • Matros, Alexander, 2012. "Sad-Loser contests," Journal of Mathematical Economics, Elsevier, vol. 48(3), pages 155-162.
  • Handle: RePEc:eee:mateco:v:48:y:2012:i:3:p:155-162
    DOI: 10.1016/j.jmateco.2012.03.001
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    References listed on IDEAS

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    Cited by:

    1. Chowdhury, Subhasish M. & Sheremeta, Roman M., 2011. "Multiple equilibria in Tullock contests," Economics Letters, Elsevier, vol. 112(2), pages 216-219, August.
    2. repec:pit:wpaper:328 is not listed on IDEAS
    3. Subhashish Modak Chowdhury & Roman M. Sheremeta, 2009. "A generalized Tullock contest and the existence of multiple equilibria," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 09-08, School of Economics, University of East Anglia, Norwich, UK..

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    Keywords

    Lottery; Contest; Winner’s reward;

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