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Prize-allocation rules in generalized team contests

Author

Listed:
  • Katsuya Kobayashi

    (Hosei University)

  • Hideo Konishi

    (Boston College)

  • Kaoru Ueda

    (Nanzan University)

Abstract

We consider a generalized team contest, in which the team’s effort is produced with a general technology represented by a concave homothetic function of team members’ contributions. Furthermore, we assume that the value of the contest’s prize depends on total effort exerted in the contest. We prove the existence of positive-effort Nash equilibrium for this generalized team contest under an arbitrary profile of the teams’ prize-allocation rules, and derive a simple characterization of the team-effort-maximizing prize-sharing rule. Although our basic model assumes that each individual in a group has constant marginal effort costs, it is possible to extend the results to the case where team members’ effort cost functions have increasing marginal costs with a constant elasticity.

Suggested Citation

  • Katsuya Kobayashi & Hideo Konishi & Kaoru Ueda, 2025. "Prize-allocation rules in generalized team contests," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 79(1), pages 151-179, February.
    • Handle: RePEc:spr:joecth:v:79:y:2025:i:1:d:10.1007_s00199-024-01559-8
    DOI: 10.1007/s00199-024-01559-8
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    More about this item

    Keywords

    Team contest; Endogenous prize; Heterogeneity and complementarity of members; Prize allocation rule; Group cost minimization;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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