Comparative Statics and Welfare in Heterogeneous Contests: Bribes, Caps, and Performance Thresholds
Comparative statics for contests with two privately informed and ex ante heterogeneous contestants are analyzed. Strategies and payoffs are examined and it is shown that total effort may increase when one contestant becomes weaker. The second part of the paper considers dynamic contests in which one bidder may endogenously be revealed to be weak. For example, the first contestant has the possibility of preempting the contest by paying a bribe or taking some other action. If the bribe is not paid the second contestant infers the first contestant is relatively weak or uninterested. Adding the possibility of paying a preemptive bribe decreases expected payoff for a set of types of at least one of the contestants, possibly the contestant who is ostensibly advantaged by the option to preempt the contest. However, the payoff of the recipient of the effort and the ex ante payoff of both contestants may improve.
|Date of creation:||Aug 2007|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (905) 688-5550 3325
Fax: (905) 988-9388
Web page: http://www.brocku.ca/economics/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Che, Yeon-Koo & Gale, Ian L, 1998.
"Caps on Political Lobbying,"
American Economic Review,
American Economic Association, vol. 88(3), pages 643-51, June.
- Kirkegaard, René & Per Baltzer Overgaard, 2005.
"Pre-Auction Offers in Asymmetric First-Price and Second-Price Auctions,"
Economics Working Papers
2005-17, School of Economics and Management, University of Aarhus.
- Kirkegaard, René & Overgaard, Per Baltzer, 2008. "Pre-auction offers in asymmetric first-price and second-price auctions," Games and Economic Behavior, Elsevier, vol. 63(1), pages 145-165, May.
- René Kirkegaard & Per Baltzer Overgaard, 2005. "Pre-Auction Offers in Asymmetric First-Price and Second-Price Auctions," CIE Discussion Papers 2005-04, University of Copenhagen. Department of Economics. Centre for Industrial Economics.
- Ed Hopkins & Tatiana Kornienko, 2007. "Cross and Double Cross: Comparative Statics in First Price Auctions," Levine's Bibliography 321307000000000831, UCLA Department of Economics.
- Kong-Pin Chen, 2005.
"External Recruitment as an Incentive Device,"
Journal of Labor Economics,
University of Chicago Press, vol. 23(2), pages 259-278, April.
- Kong-Pin Chen, 2004. "External Recruitment as an incentive Device," Econometric Society 2004 North American Summer Meetings 54, Econometric Society.
- Kong-Pin Chen, 2004. "External Recruitment as an Incentive Device," Econometric Society 2004 Far Eastern Meetings 514, Econometric Society.
- repec:ebl:ecbull:v:3:y:2006:i:9:p:1-8 is not listed on IDEAS
- Lien, Da-Hsiang Donald, 1990. "Corruption and allocation efficiency," Journal of Development Economics, Elsevier, vol. 33(1), pages 153-164, July.
- Burguet Roberto & Perry Martin K, 2007.
"Bribery and Favoritism by Auctioneers in Sealed-Bid Auctions,"
The B.E. Journal of Theoretical Economics,
De Gruyter, vol. 7(1), pages 1-27, June.
- Roberto Burguet & Martin Perry, 2000. "Bribery and Favoritism by Auctioneers in Sealed Bid Auctions," Econometric Society World Congress 2000 Contributed Papers 1827, Econometric Society.
- Roberto Burguet & Martin Perry, 2002. "Bribery and Favoritism by Auctioneers in Sealed Bid Auctions," Departmental Working Papers 200205, Rutgers University, Department of Economics.
- Chan, William, 1996. "External Recruitment versus Internal Promotion," Journal of Labor Economics, University of Chicago Press, vol. 14(4), pages 555-70, October.
- Nicolas Sahuguet, 2006. "Caps in asymmetric all-pay auctions with incomplete information," Economics Bulletin, AccessEcon, vol. 3(9), pages 1-8.
- Hopkins Ed & Kornienko Tatiana, 2007. "Cross and Double Cross: Comparative Statics in First Price and All Pay Auctions," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 7(1), pages 1-25, May.
- Che, Yeon-Koo & Gale, Ian, 2006.
"Caps on Political Lobbying: Reply,"
6097, University Library of Munich, Germany.
- Lebrun, Bernard, 1998. "Comparative Statics in First Price Auctions," Games and Economic Behavior, Elsevier, vol. 25(1), pages 97-110, October.
- Gavious, Arieh & Moldovanu, Benny & Sela, Aner, 2000.
"Bid Costs and Endogenous Bid Caps,"
Sonderforschungsbereich 504 Publications
01-19, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
- PARREIRAS, SÃ©rgio O. & RUBINCHIK-PESSACH, Anna, 2006. "Contests with heterogeneous agents," CORE Discussion Papers 2006004, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Clark, Derek J. & Riis, Christian, 2000. "Allocation efficiency in a competitive bribery game," Journal of Economic Behavior & Organization, Elsevier, vol. 42(1), pages 109-124, May.
- Amann, Erwin & Leininger, Wolfgang, 1996. "Asymmetric All-Pay Auctions with Incomplete Information: The Two-Player Case," Games and Economic Behavior, Elsevier, vol. 14(1), pages 1-18, May.
- Todd R. Kaplan & David Wettstein, 2006. "Caps on Political Lobbying: Comment," American Economic Review, American Economic Association, vol. 96(4), pages 1351-1354, September.
When requesting a correction, please mention this item's handle: RePEc:brk:wpaper:0702. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jean-Francois Lamarche)
If references are entirely missing, you can add them using this form.