IDEAS home Printed from https://ideas.repec.org/p/fsu/wpaper/wp2017_03_01.html
   My bibliography  Save this paper

Contests between groups of unknown size

Author

Listed:
  • Luke Boosey

    (Department of Economics, Florida State University)

  • Philip Brookins

    (Max Planck Institute for Research on Collective Goods)

  • Dmitry Ryvkin

    (Department of Economics, Florida State University)

Abstract

We consider group contests where the number of competing groups is fixed but group sizes are stochastic and unobservable to contest participants at the time of investment. We allow for arbitrary correlation between group sizes. When the distribution of group sizes is symmetric, the symmetric equilibrium aggregate investment is always lower than in a symmetric group contest where the same expected group size is commonly known. The same holds for asymmetric distributions of group sizes in contests between two groups. The reduction in investment due to population uncertainty is stronger the larger the variance in appropriately defined relative group impacts. When group sizes are independent conditional on a common shock, a stochastic increase in the common shock mitigates the effect of group size uncertainty unless the common and idiosyncratic components of group size are strong complements.

Suggested Citation

  • Luke Boosey & Philip Brookins & Dmitry Ryvkin, 2017. "Contests between groups of unknown size," Working Papers wp2017_03_01, Department of Economics, Florida State University.
  • Handle: RePEc:fsu:wpaper:wp2017_03_01
    as

    Download full text from publisher

    File URL: https://coss.fsu.edu/econpapers/wpaper/wp2017_03_01.pdf
    File Function: First version, 2017-03
    Download Restriction: no

    File URL: https://coss.fsu.edu/econpapers/wpaper/wp2017_03_01.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Nava Kahana & Doron Klunover, 2015. "A note on Poisson contests," Public Choice, Springer, vol. 165(1), pages 97-102, October.
    2. Chowdhury, Subhasish M. & Lee, Dongryul & Sheremeta, Roman M., 2013. "Top guns may not fire: Best-shot group contests with group-specific public good prizes," Journal of Economic Behavior & Organization, Elsevier, vol. 92(C), pages 94-103.
    3. Makris, Miltiadis, 2009. "Private provision of discrete public goods," Games and Economic Behavior, Elsevier, vol. 67(1), pages 292-299, September.
    4. Kahana, Nava & Klunover, Doron, 2016. "Complete rent dissipation when the number of rent seekers is uncertain," Economics Letters, Elsevier, vol. 141(C), pages 8-10.
    5. Roger B. Myerson, 1998. "Population uncertainty and Poisson games," International Journal of Game Theory, Springer;Game Theory Society, vol. 27(3), pages 375-392.
    6. Qiang Fu & Qian Jiao & Jingfeng Lu, 2011. "On disclosure policy in contests with stochastic entry," Public Choice, Springer, vol. 148(3), pages 419-434, September.
    7. Philip Brookins & Dmitry Ryvkin, 2016. "Equilibrium existence in group contests," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 4(2), pages 265-276, October.
    8. Myerson, Roger B., 2000. "Large Poisson Games," Journal of Economic Theory, Elsevier, vol. 94(1), pages 7-45, September.
    9. Drugov, Mikhail & Ryvkin, Dmitry, 2017. "Winner-Take-All Tournaments," CEPR Discussion Papers 12067, C.E.P.R. Discussion Papers.
    10. Roger Myerson & Karl Wärneryd, 2006. "Population uncertainty in contests," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 27(2), pages 469-474, January.
    11. Joan Esteban & Debraj Ray, 2001. "Social decision rules are not immune to conflict," Economics of Governance, Springer, vol. 2(1), pages 59-67, March.
    12. Kolmar, Martin & Rommeswinkel, Hendrik, 2013. "Contests with group-specific public goods and complementarities in efforts," Journal of Economic Behavior & Organization, Elsevier, vol. 89(C), pages 9-22.
    13. De Sinopoli, Francesco & Pimienta, Carlos, 2009. "Undominated (and) perfect equilibria in Poisson games," Games and Economic Behavior, Elsevier, vol. 66(2), pages 775-784, July.
    14. Kyung Baik, 2008. "Contests with group-specific public-good prizes," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 30(1), pages 103-117, January.
    15. Nitzan, Shmuel, 1991. "Collective Rent Dissipation," Economic Journal, Royal Economic Society, vol. 101(409), pages 1522-1534, November.
    16. Ryvkin, Dmitry, 2011. "The optimal sorting of players in contests between groups," Games and Economic Behavior, Elsevier, vol. 73(2), pages 564-572.
    17. Levin, Dan & Ozdenoren, Emre, 2004. "Auctions with uncertain numbers of bidders," Journal of Economic Theory, Elsevier, vol. 118(2), pages 229-251, October.
    18. Drugov, Mikhail & Ryvkin, Dmitry, 2017. "Biased contests for symmetric players," Games and Economic Behavior, Elsevier, vol. 103(C), pages 116-144.
    19. Edward P. Lazear, 1999. "Personnel Economics: Past Lessons and Future Directions," NBER Working Papers 6957, National Bureau of Economic Research, Inc.
    20. Katz, Eliakim & Nitzan, Shmuel & Rosenberg, Jacob, 1990. "Rent-Seeking for Pure Public Goods," Public Choice, Springer, vol. 65(1), pages 49-60, April.
    21. Harstad, Ronald M. & Kagel, John H. & Levin, Dan, 1990. "Equilibrium bid functions for auctions with an uncertain number of bidders," Economics Letters, Elsevier, vol. 33(1), pages 35-40, May.
    22. Makris, Miltiadis, 2008. "Complementarities and macroeconomics: Poisson games," Games and Economic Behavior, Elsevier, vol. 62(1), pages 180-189, January.
    23. McAfee, R. Preston & McMillan, John, 1987. "Auctions with a stochastic number of bidders," Journal of Economic Theory, Elsevier, vol. 43(1), pages 1-19, October.
    24. Riaz, Khalid & Shogren, Jason F & Johnson, Stanley R, 1995. "A General Model of Rent Seeking for Public Goods," Public Choice, Springer, vol. 82(3-4), pages 243-259, March.
    25. Richard Cornes & Roger Hartley, 2005. "Asymmetric contests with general technologies," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 26(4), pages 923-946, November.
    26. Esteban, Joan & Ray, Debraj, 2001. "Collective Action and the Group Size Paradox," American Political Science Review, Cambridge University Press, vol. 95(3), pages 663-672, September.
    27. Lim, Wooyoung & Matros, Alexander, 2009. "Contests with a stochastic number of players," Games and Economic Behavior, Elsevier, vol. 67(2), pages 584-597, November.
    28. Michael R. Baye & Guoqiang Tian & Jianxin Zhou, 1993. "Characterizations of the Existence of Equilibria in Games with Discontinuous and Non-quasiconcave Payoffs," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 60(4), pages 935-948.
    29. Barbieri, Stefano & Malueg, David A., 2016. "Private-information group contests: Best-shot competition," Games and Economic Behavior, Elsevier, vol. 98(C), pages 219-234.
    30. Nitzan, Shmuel & Ueda, Kaoru, 2011. "Prize sharing in collective contests," European Economic Review, Elsevier, vol. 55(5), pages 678-687, June.
    31. Szidarovszky, Ferenc & Okuguchi, Koji, 1997. "On the Existence and Uniqueness of Pure Nash Equilibrium in Rent-Seeking Games," Games and Economic Behavior, Elsevier, vol. 18(1), pages 135-140, January.
    32. Baik, Kyung Hwan, 1993. "Effort levels in contests : The public-good prize case," Economics Letters, Elsevier, vol. 41(4), pages 363-367.
    33. Nitzan, Shmuel & Ueda, Kaoru, 2009. "Collective contests for commons and club goods," Journal of Public Economics, Elsevier, vol. 93(1-2), pages 48-55, February.
    34. Boosey, Luke & Brookins, Philip & Ryvkin, Dmitry, 2017. "Contests with group size uncertainty: Experimental evidence," Games and Economic Behavior, Elsevier, vol. 105(C), pages 212-229.
    35. Mohlin, Erik & Östling, Robert & Wang, Joseph Tao-yi, 2015. "Lowest unique bid auctions with population uncertainty," Economics Letters, Elsevier, vol. 134(C), pages 53-57.
    36. Nti, Kofi O., 1998. "Effort and performance in group contests," European Journal of Political Economy, Elsevier, vol. 14(4), pages 769-781, November.
    37. Lee, Dongryul, 2012. "Weakest-link contests with group-specific public good prizes," European Journal of Political Economy, Elsevier, vol. 28(2), pages 238-248.
    38. Dmitry Ryvkin, 2013. "Heterogeneity of Players and Aggregate Effort in Contests," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 22(4), pages 728-743, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mikhail Drugov & Dmitry Ryvkin, 2019. "The shape of luck and competition in tournaments," Working Papers w0251, New Economic School (NES).
    2. Arye Hillman & Ngo Van Long, 2017. "The social cost of contestable benefits," CIRANO Working Papers 2017s-11, CIRANO.
    3. Boris Ginzburg, 2021. "Optimal Price Of Entry Into A Competition," Economic Inquiry, Western Economic Association International, vol. 59(1), pages 280-286, January.
    4. Arye L. Hillman & Ngo Van Long, 2017. "Rent Seeking: The Social Cost of Contestable Benefits," CESifo Working Paper Series 6462, CESifo.
    5. Luke Boosey & Philip Brookins & Dmitry Ryvkin, 2020. "Entry in group contests," Working Papers wp2020_02_01, Department of Economics, Florida State University.
    6. Ryvkin, Dmitry & Drugov, Mikhail, 2020. "The shape of luck and competition in winner-take-all tournaments," Theoretical Economics, Econometric Society, vol. 15(4), November.
    7. Luke Boosey & Philip Brookins & Dmitry Ryvkin, 2020. "Information Disclosure in Contests with Endogenous Entry: An Experiment," Management Science, INFORMS, vol. 66(11), pages 5128-5150, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Arye L. Hillman & Ngo Van Long, 2017. "Rent Seeking: The Social Cost of Contestable Benefits," CESifo Working Paper Series 6462, CESifo.
    2. Arye Hillman & Ngo Van Long, 2017. "The social cost of contestable benefits," CIRANO Working Papers 2017s-11, CIRANO.
    3. Boosey, Luke & Brookins, Philip & Ryvkin, Dmitry, 2017. "Contests with group size uncertainty: Experimental evidence," Games and Economic Behavior, Elsevier, vol. 105(C), pages 212-229.
    4. Mercier, Jean-François, 2018. "Non-deterministic group contest with private information," Mathematical Social Sciences, Elsevier, vol. 95(C), pages 47-53.
    5. Martin Kolmar & Hendrik Rommeswinkel, 2020. "Group size and group success in conflicts," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 55(4), pages 777-822, December.
    6. Brookins, Philip & Jindapon, Paan, 2021. "Risk preference heterogeneity in group contests," Journal of Mathematical Economics, Elsevier, vol. 95(C).
    7. Eliaz, Kfir & Wu, Qinggong, 2018. "A simple model of competition between teams," Journal of Economic Theory, Elsevier, vol. 176(C), pages 372-392.
    8. Ryvkin, Dmitry & Drugov, Mikhail, 2020. "The shape of luck and competition in winner-take-all tournaments," Theoretical Economics, Econometric Society, vol. 15(4), November.
    9. Mikhail Drugov & Dmitry Ryvkin, 2019. "The shape of luck and competition in tournaments," Working Papers w0251, Center for Economic and Financial Research (CEFIR).
    10. Dmitry Ryvkin & Mikhail Drugov, 2017. "Tournaments," Working Papers wp2017_03_02, Department of Economics, Florida State University.
    11. Baik, Kyung Hwan & Jung, Hanjoon Michael, 2021. "Contests with multiple alternative prizes: Public-good/bad prizes and externalities," Journal of Mathematical Economics, Elsevier, vol. 92(C), pages 103-116.
    12. Drugov, Mikhail & Ryvkin, Dmitry, 2017. "Winner-Take-All Tournaments," CEPR Discussion Papers 12067, C.E.P.R. Discussion Papers.
    13. 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.
    14. Brookins, Philip & Lightle, John P. & Ryvkin, Dmitry, 2015. "Optimal sorting in group contests with complementarities," Journal of Economic Behavior & Organization, Elsevier, vol. 112(C), pages 311-323.
    15. Luke Boosey & Philip Brookins & Dmitry Ryvkin, 2020. "Information Disclosure in Contests with Endogenous Entry: An Experiment," Management Science, INFORMS, vol. 66(11), pages 5128-5150, November.
    16. Christian Ewerhart & Federico Quartieri, 2020. "Unique equilibrium in contests with incomplete information," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 70(1), pages 243-271, July.
    17. Dongryul Lee & Joon Song, 2019. "Optimal Team Contests to Induce More Efforts," Journal of Sports Economics, , vol. 20(3), pages 448-476, April.
    18. Luke Boosey & Philip Brookins & Dmitry Ryvkin, 2020. "Entry in group contests," Working Papers wp2020_02_01, Department of Economics, Florida State University.
    19. 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.
    20. Send, Jonas, 2020. "Conflict between non-exclusive groups," Journal of Economic Behavior & Organization, Elsevier, vol. 177(C), pages 858-874.

    More about this item

    Keywords

    group contest; stochastic group size; population uncertainty; relative group impact;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fsu:wpaper:wp2017_03_01. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dmitry Ryvkin (email available below). General contact details of provider: https://edirc.repec.org/data/defsuus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.