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An axiomatization of difference-form contest success functions

Author

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  • María Cubel

    () (Universitat de Barcelona & IEB)

  • Santiago Sanchez-Pages

    () (Edinburgh School of Economics & University of Barcelona)

Abstract

This paper presents an axiomatic characterization of difference-form group contests, that is, contests fought among groups and where their probability of victory depends on the difference of their effective efforts. This axiomatization rests on the property of Absolute Consistency, stating that the difference in winning probabilities between two contenders in the grand contest must be the same as when they engage in smaller contests. This property overcomes some of the drawbacks of the widely-used ratio-form contest success functions. Our characterization shows that the criticisms commonly-held against difference-form contests success functions, such as lack of scale invariance, are unfounded. Finally, we extend our axiomatization to relative-difference contests where winning probabilities depend on the difference of contenders effective efforts relative to total aggregate effort.

Suggested Citation

  • María Cubel & Santiago Sanchez-Pages, 2015. "An axiomatization of difference-form contest success functions," Working Papers 2015/5, Institut d'Economia de Barcelona (IEB).
  • Handle: RePEc:ieb:wpaper:2013/6/doc2015-5
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    References listed on IDEAS

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    Cited by:

    1. Lu, Jingfeng & Wang, Zhewei, 2015. "Axiomatizing multi-prize nested lottery contests: A complete and strict ranking perspective," Journal of Economic Behavior & Organization, Elsevier, vol. 116(C), pages 127-141.
    2. Jingfeng Lu & Zhewei Wang, 2016. "Axiomatization of reverse nested lottery contests," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 47(4), pages 939-957, December.
    3. repec:eee:jeborg:v:150:y:2018:i:c:p:404-422 is not listed on IDEAS
    4. Christian Ewerhart, 2015. "Contest success functions: the common-pool perspective," ECON - Working Papers 195, Department of Economics - University of Zurich.
    5. Alberto Vesperoni, 2016. "A contest success function for rankings," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 47(4), pages 905-937, December.

    More about this item

    Keywords

    Contests; groups; contest success function; axioms;

    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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