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Prize Sharing in Collective Contests

Author

Listed:
  • Shmuel Nitzan

    () (Bar-Ilan University)

  • Kaoru Ueda

    (Nanzan University)

Abstract

The characteristics of endogenously determined sharing rules and the group-size paradox are studied in a model of group contest with the following features: (i) The prize has mixed private-public good characteristics. (ii) Groups can differ in marginal cost of effort and their membership size. (iii) In each group the members decide how much effort to put without observing the sharing rules of the other groups. We provide simple characterizations of the relationship between group characteristics, performance of the competing groups (winning probability and per capita expected utility) and the type of sharing rules they select. Interestingly, richer and more efficient groups or groups with larger valuation of the prize tend to be more equalitarian. We also clarify under what circumstances such tendency is due to larger membership.

Suggested Citation

  • Shmuel Nitzan & Kaoru Ueda, 2010. "Prize Sharing in Collective Contests," Working Papers 2010-08, Bar-Ilan University, Department of Economics.
  • Handle: RePEc:biu:wpaper:2010-08
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Shmuel Nitzan & Kaoru Ueda, 2014. "Intra-group heterogeneity in collective contests," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 43(1), pages 219-238, June.
    2. Priks, Mikael, 2011. "Firm competition and incentive pay: Rent seeking at work," Economics Letters, Elsevier, vol. 113(2), pages 154-156.
    3. Philip Brookins & John P. Lightle & Dmitry Ryvkin, 2015. "The effects of communication and sorting on output in heterogeneous weak-link group contests," Working Papers wp2014_01_01, Department of Economics, Florida State University.
    4. Junichiro Ishida, 2013. "Multilayered Tournaments," ISER Discussion Paper 0879, Institute of Social and Economic Research, Osaka University.
    5. repec:spr:annopr:v:238:y:2016:i:1:d:10.1007_s10479-015-2099-7 is not listed on IDEAS
    6. NITZAN, Shmuel & UEDA, Kaoru, 2016. "Selective Incentives and Intra-Group Heterogeneity in Collective Contents," Discussion paper series HIAS-E-24, Hitotsubashi Institute for Advanced Study, Hitotsubashi University.
    7. Paul Pecorino, 2016. "Individual welfare and the group size paradox," Public Choice, Springer, vol. 168(1), pages 137-152, July.
    8. Stefano Barbieri & David Malueg & Iryna Topolyan, 2014. "The best-shot all-pay (group) auction with complete information," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 57(3), pages 603-640, November.
    9. Martin Kolmar & Andreas Wagener, 2013. "Inefficiency As A Strategic Device In Group Contests Against Dominant Opponents," Economic Inquiry, Western Economic Association International, vol. 51(4), pages 2083-2095, October.
    10. Heinrich Ursprung, 2012. "The evolution of sharing rules in rent seeking contests: Incentives crowd out cooperation," Public Choice, Springer, vol. 153(1), pages 149-161, October.
    11. Jingjing Zhang, 2012. "Communication in asymmetric group competition over public goods," ECON - Working Papers 069, Department of Economics - University of Zurich.
    12. repec:eee:poleco:v:49:y:2017:i:c:p:71-83 is not listed on IDEAS
    13. David K Levine & Salvatore Modica, 2013. "Peer Discipline and the Strength of Organizations," Levine's Bibliography 786969000000000713, UCLA Department of Economics.
    14. 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.
    15. repec:elg:eechap:15325_6 is not listed on IDEAS
    16. Paul Pecorino, 2015. "Olson’s Logic of Collective Action at fifty," Public Choice, Springer, vol. 162(3), pages 243-262, March.
    17. Shmuel Nitzan & Kaoru Ueda, 2014. "Cost Sharing in Collective Contests," CESifo Working Paper Series 4825, CESifo Group Munich.

    More about this item

    Keywords

    Collective contest; mixed public-good prize; endogenous sharing rules; the group-size paradox;

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • 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

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