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Sequential Contests with Synergy and Budget Constraints

  • Megidish, Reut
  • Sela, Aner
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    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 constraint 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, nonrestrictive or partially restrictive. 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.

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    Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8383.

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    Date of creation: May 2011
    Date of revision:
    Handle: RePEc:cpr:ceprdp:8383
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    1. Carolyn Pitchik, 2008. "Budget-Constrained Sequential Auctions with Incomplete Information," Working Papers tecipa-342, University of Toronto, Department of Economics.
    2. Yeon-Koo Che & Ian Gale, 1998. "Caps on Political Lobbying," Microeconomics 9809003, EconWPA.
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    5. Sandro Brusco & Giuseppe Lopomo, 2009. "Simultaneous ascending auctions with complementarities and known budget constraints," Economic Theory, Springer, vol. 38(1), pages 105-124, January.
    6. 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.
    7. Dan Kovenock & Brian Roberson, 2008. "Is the 50-State Strategy Optimal?," Purdue University Economics Working Papers 1211, Purdue University, Department of Economics.
    8. Alex Robson, 2005. "Multi-Item Contests," ANU Working Papers in Economics and Econometrics 2005-446, Australian National University, College of Business and Economics, School of Economics.
    9. J. Atsu Amegashie & C. Bram Cadsby & Yang Song, 2005. "Competitive Burnout: Theory and Experimental Evidence," Working Papers 0507, University of Guelph, Department of Economics and Finance.
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    11. Warneryd, Karl, 1998. "Distributional conflict and jurisdictional organization," Journal of Public Economics, Elsevier, vol. 69(3), pages 435-450, September.
    12. Morgan, John, 2003. " Sequential Contests," Public Choice, Springer, vol. 116(1-2), pages 1-18, July.
    13. Rick Harbaugh & Tilman Klumpp, 2004. "Early Round Upsets and Championship Blowouts," Working Papers 2004-09, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
    14. Sandro Brusco & Giuseppe Lopomo, 2008. "BUDGET CONSTRAINTS AND DEMAND REDUCTION IN SIMULTANEOUS ASCENDING-BID AUCTIONS -super-* ," Journal of Industrial Economics, Wiley Blackwell, vol. 56(1), pages 113-142, 03.
    15. Konrad, Kai A., 2003. "Bidding in hierarchies
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    16. Pitchik, Carolyn & Schotter, Andrew, 1986. "Budget Constrained Sequential Auctions," Working Papers 86-21, C.V. Starr Center for Applied Economics, New York University.
    17. Alexander Matros, 2006. "Elimination Tournaments where Players Have Fixed Resources," Working Papers 205, University of Pittsburgh, Department of Economics, revised Jan 2006.
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