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Sequential Contests With Synergy And Budget Constraints

Author

Listed:
  • Aner Sela

    () (BGU)

  • Reut Megidish

    (BGU)

Abstract

We study a sequential Tullock contest with two stages and two identical prizes. The players compete for one prize in each stage and each player may win either one or two prizes. The players have either decreasing or increasing marginal values for the prizes, which are commonly known, and there is a con- straint on the total effort that each player can exert in both stages. We analyze the players' allocations of efforts along both stages when the budget constraints (effort constraints) are either restrictive, non- restrictive or partially restrictive. In particular, we show that when the players are either symmetric or asymmetric and the budget constraints are restrictive, independent of the players'values for the prizes, each player allocates his effort equally along both stages of the contest.

Suggested Citation

  • Aner Sela & Reut Megidish, 2012. "Sequential Contests With Synergy And Budget Constraints," Working Papers 1212, Ben-Gurion University of the Negev, Department of Economics.
  • Handle: RePEc:bgu:wpaper:1212
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    References listed on IDEAS

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    More about this item

    Keywords

    Sequential contests; Tullock contests; budget constrains.;

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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