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Two-Player Asymmetric Contests with Ratio-Form Contest Success Functions

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  • Kyung Hwan Baik

Abstract

I examine players' equilibrium effort levels in two-player asymmetric contests with ratio-form contest success functions. I first characterize the Nash equilibrium of the simultaneous-move game. I show that the equilibrium effort ratio is equal to the valuation ratio, and that the prize dissipation ratios for the players are the same. I also show that the prize dissipation ratio for each player is less than or equal to the minimum of the players' probabilities of winning at the Nash equilibrium and thus never exceeds a half. Then I examine how the equilibrium effort ratio, the prize dissipation ratios, and the players' equilibrium effort levels respond when the players' valuations for the prize or their abilities change. (JEL D72, C72) Copyright 2004, Oxford University Press.

Suggested Citation

  • Kyung Hwan Baik, 2004. "Two-Player Asymmetric Contests with Ratio-Form Contest Success Functions," Economic Inquiry, Western Economic Association International, vol. 42(4), pages 679-689, October.
  • Handle: RePEc:oup:ecinqu:v:42:y:2004:i:4:p:679-689
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    File URL: http://hdl.handle.net/10.1093/ei/cbh089
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    Citations

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    Cited by:

    1. Kyung Hwan Baik & Jihyun Kim, 2014. "Contests with Bilateral Delegation: Unobservable Contracts," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 170(3), pages 387-405, September.
    2. Häfner, Samuel, 2017. "A tug-of-war team contest," Games and Economic Behavior, Elsevier, vol. 104(C), pages 372-391.
    3. Blavatskyy, Pavlo R., 2010. "Contest success function with the possibility of a draw: Axiomatization," Journal of Mathematical Economics, Elsevier, vol. 46(2), pages 267-276, March.
    4. Malueg, David A. & Yates, Andrew J., 2005. "Equilibria and comparative statics in two-player contests," European Journal of Political Economy, Elsevier, vol. 21(3), pages 738-752, September.
    5. Malueg, David A. & Yates, Andrew J., 2006. "Citizen participation in pollution permit markets," Journal of Environmental Economics and Management, Elsevier, vol. 51(2), pages 205-217, March.
    6. Gürtler, Oliver, 2006. "Contractual Incentive Provision and Commitment in Rent-Seeking Contests," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 100, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    7. Kyung Hwan Baik & Jong Hwa Lee, 2013. "Endogenous Timing In Contests With Delegation," Economic Inquiry, Western Economic Association International, vol. 51(4), pages 2044-2055, October.
    8. Maria Arbatskaya & Hugo Mialon, 2010. "Multi-activity contests," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 43(1), pages 23-43, April.
    9. Giuseppe Dari-Mattiacci & Eric Langlais & Bruno Lovat & Francesco Parisi, 2013. "Asymmetries in Rent-Seeking," EconomiX Working Papers 2013-5, University of Paris Nanterre, EconomiX.

    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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