IDEAS home Printed from https://ideas.repec.org/p/gue/guelph/2010-5..html
   My bibliography  Save this paper

Preferential Treatment may Hurt: Another Application of the All-Pay Auction

Author

Listed:
  • Rene Kirkegaard

    () (Department of Economics,University of Guelph)

Abstract

In many contests a subset of contestants is granted preferential treatment which is presumably intended to be advantageous. Examples include affirmative action and biased procurement policies. In this paper, however, I show that some of the supposed beneficiaries may in fact become worse off when the favored group is diverse. The reason is that the other favored contestants become more aggressive, which may outweigh the advantage that is gained over contestants who do not receive preferential treatment. Likewise, a contestant may be made better off when a subset of his competitors is granted preferential treatment. The contest is modelled as an incomplete-information all-pay auction in which contestants have heterogenous and non-linear cost functions. Incomplete information is crucial for the results.

Suggested Citation

  • Rene Kirkegaard, 2010. "Preferential Treatment may Hurt: Another Application of the All-Pay Auction," Working Papers 1005, University of Guelph, Department of Economics and Finance.
  • Handle: RePEc:gue:guelph:2010-5.
    as

    Download full text from publisher

    File URL: http://www.uoguelph.ca/economics/repec/workingpapers/2010/2010-05.pdf
    Download Restriction: no

    Citations

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


    Cited by:

    1. Pastine, Ivan & Pastine, Tuvana, 2012. "Incumbency advantage and political campaign spending limits," Journal of Public Economics, Elsevier, vol. 96(1), pages 20-32.

    More about this item

    Keywords

    Affirmative Action; All-Pay Auctions; Contests; Preferential Treatment.;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

    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:gue:guelph:2010-5.. 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: (Stephen Kosempel). General contact details of provider: http://edirc.repec.org/data/degueca.html .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.