A New Approach to Contest Models
The purpose of this paper is to propose a symmetric two player general contest model in order to study the relationship between equilibria and crucial structural parameters of the model. In particular, given a general specification of the playersâ€™ set of possible entries, of the agentsâ€™ utility functions, and of the rules that presides over outcomes, we aim to analyze the characteristics of the set of equilibria as a function of structural characteristics of the contest technology and of the outcome function. Focusing on three main cases, we study the effect of introducing spillover in the marginal productivity of agentsâ€™ efforts and in the polarization between agentsâ€™ goals. Firstly, we show that without spillover the equilibrium effortsâ€™ intensity is uniquely connected to the ratio between marginal productivity of effort and polarization. Secondly, we are able to connect existence of multiple symmetric and asymmetric equilibria to the intensity of spillover effects into outcomes. Finally, we show that spillover in contest technology can imply the non-existence of equilibria.
|Date of creation:||03 Mar 2017|
|Date of revision:||03 Mar 2017|
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