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Difference-form group contests

Author

Listed:
  • María Cubel

    () (Universitat de Barcelona & IEB)

  • Santiago Sanchez-Pages

    () (Universitat de Barcelona)

Abstract

Contests are situations in which a set of agents compete for a valuable object, rent or award. The present paper analyzes difference-form group contests, that is, contests fought among groups and where their probability of victory depends on the difference of their effective efforts. First, we show that the non-existence of pure-strategy equilibria and the monopolization results obtained in previous analysis of difference-form contests rest critically on the assumption of a linear cost of effort. Under exponential costs, we show that pure strategy equilibria exist in a large set of cases and that more than one group can expend positive effort in equilibrium. Second, we show that inequality of valuations of victory within groups hinders their chances of prevailing in the contest. If possible; members may find beneficial to engage in progressive redistribution within their group.

Suggested Citation

  • María Cubel & Santiago Sanchez-Pages, 2014. "Difference-form group contests," Working Papers 2014/6, Institut d'Economia de Barcelona (IEB).
  • Handle: RePEc:ieb:wpaper:2013/6/doc2014-6
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    References listed on IDEAS

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    Cited by:

    1. Cubel, María & Sanchez-Pages, Santiago, 2016. "An axiomatization of difference-form contest success functions," Journal of Economic Behavior & Organization, Elsevier, vol. 131(PA), pages 92-105.

    More about this item

    Keywords

    Contests; contest success function; inequality; redistribution;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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