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Contests with an unknown number of contestants

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  • Johannes Münster

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Abstract

This paper studies rent-seeking contests where the contestants do not know the number of actively competing contestants. Two models are compared. In the first, all players are risk neutral; in the second, all have constant absolute risk aversion. If the expected fraction of active contestants is low, an increase in the number of potential contestants increases individual rent-seeking efforts. This effect is in contrast to the complete information case where individual rent-seeking efforts decrease in the number of contestants. The effect is more likely under risk neutrality, but also possible under risk aversion. Equilibrium rent seeking efforts are lower under risk aversion if and only if the expected fraction of active contestants is low. Copyright Springer Science+Business Media, B.V. 2006

Suggested Citation

  • Johannes Münster, 2006. "Contests with an unknown number of contestants," Public Choice, Springer, vol. 129(3), pages 353-368, December.
  • Handle: RePEc:kap:pubcho:v:129:y:2006:i:3:p:353-368
    DOI: 10.1007/s11127-006-9035-y
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    References listed on IDEAS

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    Cited by:

    1. repec:pit:wpaper:323 is not listed on IDEAS
    2. Caruso, Raul & Schneider, Friedrich, 2013. "Brutality of Jihadist terrorism. A contest theory perspective and empirical evidence in the period 2002–2010," Journal of Policy Modeling, Elsevier, vol. 35(5), pages 685-696.
    3. Lee, Dongryul, 2012. "Weakest-link contests with group-specific public good prizes," European Journal of Political Economy, Elsevier, vol. 28(2), pages 238-248.
    4. Münster, Johannes, 2008. "Repeated contests with asymmetric information
      [Wiederholte Wettkämpfe mit asymmetrischer Information]
      ," Discussion Papers, Research Unit: Market Processes and Governance SP II 2008-08, Social Science Research Center Berlin (WZB).
    5. Lim, Wooyoung & Matros, Alexander, 2009. "Contests with a stochastic number of players," Games and Economic Behavior, Elsevier, vol. 67(2), pages 584-597, November.

    More about this item

    Keywords

    Contest; Rent-seeking; Number uncertainty; Risk aversion;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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