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Contests for Shares of an Uncertain Resource

Author

Listed:
  • Cary Deck

    (University of Alabama)

  • Lance Howe

    (University of Alaska Anchorage)

  • Matthew Reimer

    (University of Alaska Anchorage)

  • Jonathan Alevy

    (University of Alaska Anchorage)

  • Kyle Borash

    (University of Alaska Anchorage)

Abstract

The process of allocating rights to resources can be viewed as a contest: parties compete with each other for the right to claim a larger allocation. In some situations, the amount of the resource that is available to allocate may be unknown when parties are competing for shares and perhaps not realized until contestants actually attempt to claim their shares of the resource. For example, fishing quotas may be awarded based on estimated fish populations, but if there are fewer fish than anticipated, those who are last to harvest may not be able to fill their quota. We model contests of this form and test the predictions of the model using a controlled laboratory experiment. The general result is that participants compete less intensively for shares of the resource when uncertainty regarding the size of the prize is resolved later in the process.

Suggested Citation

  • Cary Deck & Lance Howe & Matthew Reimer & Jonathan Alevy & Kyle Borash, 2020. "Contests for Shares of an Uncertain Resource," Working Papers 2020-02, University of Alaska Anchorage, Department of Economics.
  • Handle: RePEc:ala:wpaper:2020-02
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    File URL: http://www.econpapers.uaa.alaska.edu/RePEC/ala/wpaper/ALA202002.pdf
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    More about this item

    Keywords

    Contests with Uncertain Prizes; Fisheries; Experimental Economics;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation

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