We consider lotteries with reimbursements. It turns out that without loss of generality it is enough analyze lotteries where the winner gets her expenses reimbursed. We find that such a lottery (Sad-Loser) has multiple pure-strategy equilibria. We describe all equilibria and discuss their properties. In particular, we find (1) a sufficient condition for the net total spending to be higher in the Sad-Loser lottery than in the standard lottery, (2) that the Exclusion Principle holds.
|Date of creation:||Jul 2006|
|Date of revision:||Dec 2008|
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- Cohen, Chen & Sela, Aner, 2005. "Manipulations in contests," Economics Letters, Elsevier, vol. 86(1), pages 135-139, January.
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- Stein, William E, 2002. " Asymmetric Rent-Seeking with More Than Two Contestants," Public Choice, Springer, vol. 113(3-4), pages 325-36, December.
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