Intra-Group Heterogeneity in Collective Contests
Collective contests are examined permitting heterogeneity of stakes within every competing group. Our first concern is whether unequal distribution of stakes in a group can enhance its win probability. Our second concern is whether a large stake in a group can be individually disadvantageous. We find that if a contest is sufficiently "hard" for a group, the answers to these questions are positive under plausible conditions. In such situations, monopoly of the private stake is most effective in enhancing the groupâ€™s performance. Ironically, in the same cases, the welfare of many group members would be negatively related to the size of their individual stake.
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