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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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    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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