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Strategic choice of sharing rules in collective contests

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  • Pau Balart
  • Sabine Flamand
  • Orestis Troumpounis

Abstract

Competition between groups often involves prizes that have both a public and a private component. The exact nature of the prize not only affects the strategic choice of the sharing rules determining its allocation but also gives rise to an interesting phenomenon not observed when the prize is either purely public or purely private. Indeed, we show that in the two-groups contest, for most degrees of privateness of the prize, the large group uses its sharing rule as a mean to exclude the small group from the competition, a situation called monopolization. Conversely, there is a degree of relative privateness above which the small group, besides being active, even outperforms the large group in terms of winning probabilities, giving rise to the celebrated group size paradox. Copyright Springer-Verlag Berlin Heidelberg 2016

Suggested Citation

  • Pau Balart & Sabine Flamand & Orestis Troumpounis, 2016. "Strategic choice of sharing rules in collective contests," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 46(2), pages 239-262, February.
  • Handle: RePEc:spr:sochwe:v:46:y:2016:i:2:p:239-262
    DOI: 10.1007/s00355-015-0911-6
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Dhritiman Gupta, 2020. "Prize sharing rules in collective contests: When does group size matter?," Discussion Papers 20-04, Indian Statistical Institute, Delhi.
    2. Crutzen, Benoît S Y & Flamand, Sabine & Sahuguet, Nicolas, 2020. "A model of a team contest, with an application to incentives under list proportional representation," Journal of Public Economics, Elsevier, vol. 182(C).
    3. Pau Balart & Sabine Flamand & Oliver Gürtler & Orestis Troumpounis, 2018. "Sequential choice of sharing rules in collective contests," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 20(5), pages 703-724, October.
    4. March, Christoph & Sahm, Marco, 2019. "The Perks of Being in the Smaller Team: Incentives in Overlapping Contests," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203509, Verein für Socialpolitik / German Economic Association.
    5. Tverskoi, Denis & Senthilnathan, Athmanathan & Gavrilets, Sergey, 2021. "The dynamics of cooperation, power, and inequality in a group-structured society," SocArXiv 24svr, Center for Open Science.
    6. Konstantinos Protopappas, 2022. "Optimal lobbying pricing," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 59(1), pages 37-61, July.
    7. Daniel Cardona & Jenny De Freitas & Antoni Rubí-Barceló, 2018. "Polarization or Moderation? Intra-group heterogeneity in endogenous-policy contest," DEA Working Papers 87, Universitat de les Illes Balears, Departament d'Economía Aplicada.
    8. Kyung Hwan Baik & Jong Hwa Lee & Seokho Lee, 2022. "Endogenous timing in three-player Tullock contests," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 59(3), pages 495-523, October.
    9. Dhritiman Gupta, 2020. "Prize Sharing Rules in Collective Contests: Towards Strategic Foundations," Discussion Papers 20-01, Indian Statistical Institute, Delhi.
    10. Mercier, Jean-François, 2018. "Non-deterministic group contest with private information," Mathematical Social Sciences, Elsevier, vol. 95(C), pages 47-53.

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    More about this item

    Keywords

    D23; D71; D72; H41;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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