A Threshold Interpretation of the Ratio-Form Contest Success Function
Ratio-form contest success functions have been widely used due to their appealing axiomatic properties. Existing microfoundational models offer additional justifications for their use in specific economic applications. I propose a new structure under which a ratio-form contest success function can be derived as a limit result using an underlying contest with multiple rounds and threshold success levels. This model generalizes the stochastic equivalence of ratio-form contest success functions and patent race games, allowing greater fl exibility in the underlying structural interpretation. I additionally formulate a spatial interpretation of the model and apply the general structure to existing models of conflict.
|Date of creation:||Sep 2009|
|Date of revision:||Mar 2010|
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- Perez-Castrillo, J David & Verdier, Thierry, 1992. " A General Analysis of Rent-Seeking Games," Public Choice, Springer, vol. 73(3), pages 335-50, April.
- Birendra K. Rai & Rajiv Sarin, 2007. "Generalized Contest Success Functions," Jena Economic Research Papers 2007-082, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
- Jeremy Petranka, 2008. "A Conflict Theory of Voting," Working Papers 2010-07, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy, revised Mar 2010.
- Birendra K. Rai & Rajiv Sarin, 2007. "Parametric Contest Success Functions," Jena Economic Research Papers 2007-010, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
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