IDEAS home Printed from https://ideas.repec.org/a/spr/sochwe/v58y2022i1d10.1007_s00355-021-01346-7.html
   My bibliography  Save this article

Group formation in a dominance-seeking contest

Author

Listed:
  • Dongryul Lee

    (Sungshin University)

  • Pilwon Kim

    (UNIST (Ulsan National Institute of Science and Technology))

Abstract

We study a group formation game. Players with different strengths form groups before expending effort to win a prize. The prize has the nature of the reward for outdoing in competition such as holding a dominant position among players or being recognized as a dominant status. So, it has the nature of public goods within a winning group (group-specific public goods). In open membership game, we find that a single player stays alone and the others form a group together in equilibrium. The stand-alone player can be anyone except for the first and second strongest players in the contest. However, strong (Nash) equilibrium predicts that the weakest player is isolated. Similarly, we find that in exclusive membership game, every structure can emerge in equilibrium but the weakest player is isolated in the strong equilibrium.

Suggested Citation

  • Dongryul Lee & Pilwon Kim, 2022. "Group formation in a dominance-seeking contest," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 58(1), pages 39-68, January.
    • Handle: RePEc:spr:sochwe:v:58:y:2022:i:1:d:10.1007_s00355-021-01346-7
    DOI: 10.1007/s00355-021-01346-7
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s00355-021-01346-7
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s00355-021-01346-7?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, January.
    2. repec:wly:soecon:v:83:1:y:2016:p:105-125 is not listed on IDEAS
    3. Richard Cornes & Roger Hartley, 2005. "Asymmetric contests with general technologies," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 26(4), pages 923-946, November.
    4. Subhasish M. Chowdhury & Iryna Topolyan, 2016. "Best-shot versus weakest-link in political lobbying: an application of group all-pay auction," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 47(4), pages 959-971, December.
    5. Santiago Sánchez-Pagés, 2007. "Endogenous coalition formation in contests," Review of Economic Design, Springer;Society for Economic Design, vol. 11(2), pages 139-163, September.
    6. Baik, Kyung Hwan & Shogren, Jason F, 1995. "Competitive-Share Group Formation in Rent-Seeking Contests," Public Choice, Springer, vol. 83(1-2), pages 113-126, April.
    7. Konrad, Kai A., 2009. "Strategy and Dynamics in Contests," OUP Catalogue, Oxford University Press, number 9780199549603.
    8. Garfinkel, Michelle R., 2004. "Stable alliance formation in distributional conflict," European Journal of Political Economy, Elsevier, vol. 20(4), pages 829-852, November.
    9. Claude d'Aspremont & Alexis Jacquemin & Jean Jaskold Gabszewicz & John A. Weymark, 1983. "On the Stability of Collusive Price Leadership," Canadian Journal of Economics, Canadian Economics Association, vol. 16(1), pages 17-25, February.
    10. Subhasish M. Chowdhury & Dongryul Lee & Iryna Topolyan, 2016. "The Max‐Min Group Contest: Weakest‐link (Group) All‐Pay Auction," Southern Economic Journal, John Wiley & Sons, vol. 83(1), pages 105-125, July.
    11. Chowdhury, Subhasish M. & Lee, Dongryul & Sheremeta, Roman M., 2013. "Top guns may not fire: Best-shot group contests with group-specific public good prizes," Journal of Economic Behavior & Organization, Elsevier, vol. 92(C), pages 94-103.
    12. Sheremeta, Roman, 2018. "Experimental Research on Contests," MPRA Paper 89327, University Library of Munich, Germany.
    13. Sang-Seung Yi, 1998. "Endogenous Formation of Joint Ventures with Efficiency Gains," RAND Journal of Economics, The RAND Corporation, vol. 29(3), pages 610-631, Autumn.
    14. Herbst, Luisa & Konrad, Kai A. & Morath, Florian, 2015. "Endogenous group formation in experimental contests," European Economic Review, Elsevier, vol. 74(C), pages 163-189.
    15. Krueger, Anne O, 1974. "The Political Economy of the Rent-Seeking Society," American Economic Review, American Economic Association, vol. 64(3), pages 291-303, June.
    16. Joan Esteban, 2003. "Olson VS. Coase: Coalitional Worth in Conflict," Theory and Decision, Springer, vol. 55(4), pages 339-357, December.
    17. Stein, William E, 2002. "Asymmetric Rent-Seeking with More Than Two Contestants," Public Choice, Springer, vol. 113(3-4), pages 325-336, December.
    18. Subhasish Chowdhury & Oliver Gürtler, 2015. "Sabotage in contests: a survey," Public Choice, Springer, vol. 164(1), pages 135-155, July.
    19. Dongryul Lee, 2015. "Group contests and technologies," Economics Bulletin, AccessEcon, vol. 35(4), pages 2427-2438.
    20. Ray, Debraj & Vohra, Rajiv, 1999. "A Theory of Endogenous Coalition Structures," Games and Economic Behavior, Elsevier, vol. 26(2), pages 286-336, January.
    21. Hart, Sergiu & Kurz, Mordecai, 1983. "Endogenous Formation of Coalitions," Econometrica, Econometric Society, vol. 51(4), pages 1047-1064, July.
    22. Gil Epstein & Yosef Mealem, 2009. "Group specific public goods, orchestration of interest groups with free riding," Public Choice, Springer, vol. 139(3), pages 357-369, June.
    23. Baik, Kyung Hwan, 1993. "Effort levels in contests : The public-good prize case," Economics Letters, Elsevier, vol. 41(4), pages 363-367.
    24. Emmanuel Dechenaux & Dan Kovenock & Roman Sheremeta, 2015. "A survey of experimental research on contests, all-pay auctions and tournaments," Experimental Economics, Springer;Economic Science Association, vol. 18(4), pages 609-669, December.
    25. Baik, Kyung Hwan & Lee, Sanghack, 2001. "Strategic Groups and Rent Dissipation," Economic Inquiry, Western Economic Association International, vol. 39(4), pages 672-684, October.
    26. Kyung Hwan Baik, 2016. "Endogenous Group Formation in Contests: Unobservable Sharing Rules," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 25(2), pages 400-419, April.
    27. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
    28. Keith Hartley & Todd Sandler (ed.), 2007. "Handbook of Defense Economics," Handbook of Defense Economics, Elsevier, edition 1, volume 2, number 1.
    29. Roger D. Congleton & Arye L. Hillman (ed.), 2015. "Companion to the Political Economy of Rent Seeking," Books, Edward Elgar Publishing, number 15325.
    30. Hideo Konishi & Chen‐Yu Pan, 2020. "Sequential formation of alliances in survival contests," International Journal of Economic Theory, The International Society for Economic Theory, vol. 16(1), pages 95-105, March.
    31. Stefan Szymanski, 2010. "The Economic Design of Sporting Contests," Palgrave Macmillan Books, in: The Comparative Economics of Sport, chapter 1, pages 1-78, Palgrave Macmillan.
    32. Kolmar, Martin & Rommeswinkel, Hendrik, 2013. "Contests with group-specific public goods and complementarities in efforts," Journal of Economic Behavior & Organization, Elsevier, vol. 89(C), pages 9-22.
    33. Yi, Sang-Seung & Shin, Hyukseung, 2000. "Endogenous formation of research coalitions with spillovers," International Journal of Industrial Organization, Elsevier, vol. 18(2), pages 229-256, February.
    34. Garfinkel, Michelle R. & Skaperdas, Stergios, 2007. "Economics of Conflict: An Overview," Handbook of Defense Economics, in: Keith Hartley & Todd Sandler (ed.), Handbook of Defense Economics, edition 1, volume 2, chapter 22, pages 649-709, Elsevier.
    35. Roman M. Sheremeta, 2018. "Behavior In Group Contests: A Review Of Experimental Research," Journal of Economic Surveys, Wiley Blackwell, vol. 32(3), pages 683-704, July.
    36. Hiller, Timo, 2017. "Friends and enemies: a model of signed network formation," Theoretical Economics, Econometric Society, vol. 12(3), September.
    37. Kyung Baik, 2008. "Contests with group-specific public-good prizes," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 30(1), pages 103-117, January.
    38. Francis Bloch & Santiago Sánchez-Pagés & Raphaël Soubeyran, 2006. "When does universal peace prevail? Secession and group formation in conflict," Economics of Governance, Springer, vol. 7(1), pages 3-29, January.
    39. Debraj Ray & Rajiv Vohra, 1998. "A Theory of Endogenous Coalition Structures," Working Papers 98-1, Brown University, Department of Economics, revised Jan 1998.
    40. Kai A. Konrad & Florian Morath, 2018. "To Deter Or To Moderate? Alliance Formation In Contests With Incomplete Information," Economic Inquiry, Western Economic Association International, vol. 56(3), pages 1447-1463, July.
    41. Nitzan, Shmuel, 1991. "Collective Rent Dissipation," Economic Journal, Royal Economic Society, vol. 101(409), pages 1522-1534, November.
    42. Dongryul Lee, 2017. "Average-opinion group contest," Economics Bulletin, AccessEcon, vol. 37(1), pages 79-93.
    43. Reinhard Selten, 1973. "A Simple Model of Imperfect Competition, where 4 are Few and 6 are Many," Center for Mathematical Economics Working Papers 008, Center for Mathematical Economics, Bielefeld University.
    44. Guofu Tan & Ruqu Wang, 2010. "Coalition formation in the presence of continuing conflict," International Journal of Game Theory, Springer;Game Theory Society, vol. 39(1), pages 273-299, March.
    45. Garfinkel, Michelle R. & Skaperdas, Stergios (ed.), 2012. "The Oxford Handbook of the Economics of Peace and Conflict," OUP Catalogue, Oxford University Press, number 9780195392777.
    46. Lee, Dongryul, 2012. "Weakest-link contests with group-specific public good prizes," European Journal of Political Economy, Elsevier, vol. 28(2), pages 238-248.
    47. Subhasish M. Chowdhury & Iryna Topolyan, 2016. "The Attack-And-Defense Group Contests: Best Shot Versus Weakest Link," Economic Inquiry, Western Economic Association International, vol. 54(1), pages 548-557, January.
    48. Noh, Suk Jae, 2002. "Resource distribution and stable alliances with endogenous sharing rules," European Journal of Political Economy, Elsevier, vol. 18(1), pages 129-151, March.
    49. Dongryul Lee & Joon Song, 2019. "Optimal Team Contests to Induce More Efforts," Journal of Sports Economics, , vol. 20(3), pages 448-476, April.
    50. Kolmar, Martin, 2013. "Group Conflicts. Where do we stand?," Economics Working Paper Series 1331, University of St. Gallen, School of Economics and Political Science.
    51. Skaperdas, Stergios, 1998. "On the Formation of Alliances in Conflict and Contests," Public Choice, Springer, vol. 96(1-2), pages 25-42, July.
    52. Nitzan, Shmuel, 1994. "Modelling rent-seeking contests," European Journal of Political Economy, Elsevier, vol. 10(1), pages 41-60, May.
    53. Katz, Eliakim & Nitzan, Shmuel & Rosenberg, Jacob, 1990. "Rent-Seeking for Pure Public Goods," Public Choice, Springer, vol. 65(1), pages 49-60, April.
    54. Gary S. Becker, 1983. "A Theory of Competition Among Pressure Groups for Political Influence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 98(3), pages 371-400.
    55. Gil S. Epstein & Yosef Mealem, 2009. "Group Specific Public Goods, Orchestration of Interest Groups and Free Riding," Working Papers 2009-02, Bar-Ilan University, Department of Economics.
    56. Bloch, Francis, 1996. "Sequential Formation of Coalitions in Games with Externalities and Fixed Payoff Division," Games and Economic Behavior, Elsevier, vol. 14(1), pages 90-123, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Konishi, Hideo & Pan, Chen-Yu, 2021. "Endogenous alliances in survival contests," Journal of Economic Behavior & Organization, Elsevier, vol. 189(C), pages 337-358.
    2. Arye L. Hillman & Ngo Van Long, 2017. "Rent Seeking: The Social Cost of Contestable Benefits," CESifo Working Paper Series 6462, CESifo.
    3. Dongryul Lee & Joon Song, 2019. "Optimal Team Contests to Induce More Efforts," Journal of Sports Economics, , vol. 20(3), pages 448-476, April.
    4. Arye Hillman & Ngo Van Long, 2017. "The social cost of contestable benefits," CIRANO Working Papers 2017s-11, CIRANO.
    5. Send, Jonas, 2020. "Conflict between non-exclusive groups," Journal of Economic Behavior & Organization, Elsevier, vol. 177(C), pages 858-874.
    6. Baik, Kyung Hwan & Jung, Hanjoon Michael, 2021. "Contests with multiple alternative prizes: Public-good/bad prizes and externalities," Journal of Mathematical Economics, Elsevier, vol. 92(C), pages 103-116.
    7. Roman M. Sheremeta, 2018. "Behavior In Group Contests: A Review Of Experimental Research," Journal of Economic Surveys, Wiley Blackwell, vol. 32(3), pages 683-704, July.
    8. Brookins, Philip & Jindapon, Paan, 2021. "Risk preference heterogeneity in group contests," Journal of Mathematical Economics, Elsevier, vol. 95(C).
    9. Martin Kolmar & Hendrik Rommeswinkel, 2020. "Group size and group success in conflicts," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 55(4), pages 777-822, December.
    10. repec:elg:eechap:15325_6 is not listed on IDEAS
    11. Francis Bloch, 2009. "Endogenous formation of alliances in conflicts," Working Papers hal-00435387, HAL.
    12. Emmanuel Dechenaux & Dan Kovenock & Roman Sheremeta, 2015. "A survey of experimental research on contests, all-pay auctions and tournaments," Experimental Economics, Springer;Economic Science Association, vol. 18(4), pages 609-669, December.
    13. Garfinkel, Michelle R. & Skaperdas, Stergios, 2007. "Economics of Conflict: An Overview," Handbook of Defense Economics, in: Keith Hartley & Todd Sandler (ed.), Handbook of Defense Economics, edition 1, volume 2, chapter 22, pages 649-709, Elsevier.
    14. Herbst, Luisa & Konrad, Kai A. & Morath, Florian, 2015. "Endogenous group formation in experimental contests," European Economic Review, Elsevier, vol. 74(C), pages 163-189.
    15. Mercier, Jean-François, 2018. "Non-deterministic group contest with private information," Mathematical Social Sciences, Elsevier, vol. 95(C), pages 47-53.
    16. Martin Kolmar & Hendrik Rommeswinkel, 2010. "Group Contests with Complementarities in Efforts," CESifo Working Paper Series 3136, CESifo.
    17. Imamura, Kenzo & Konishi, Hideo & Pan, Chen-Yu, 2023. "Stability in matching with externalities: Pairs competition and oligopolistic joint ventures," Journal of Economic Behavior & Organization, Elsevier, vol. 205(C), pages 270-286.
    18. Peter-J. Jost, 2021. "Endogenous formation of entrepreneurial networks," Small Business Economics, Springer, vol. 56(1), pages 39-64, January.
    19. Kolmar, Martin & Rommeswinkel, Hendrik, 2013. "Contests with group-specific public goods and complementarities in efforts," Journal of Economic Behavior & Organization, Elsevier, vol. 89(C), pages 9-22.
    20. Johannes Münster, 2009. "Group contest success functions," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 41(2), pages 345-357, November.
    21. Kris De Jaegher, 2021. "Common‐Enemy Effects: Multidisciplinary Antecedents And Economic Perspectives," Journal of Economic Surveys, Wiley Blackwell, vol. 35(1), pages 3-33, February.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:sochwe:v:58:y:2022:i:1:d:10.1007_s00355-021-01346-7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.