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On the evolution of prize perceptions in contests

  • Boudreau, James W.
  • Shunda, Nicholas

We apply an indirect evolutionary approach to players' perceived prize valuations in contests. Evolution in finite populations leads to preferences that overstate the prize's material value and induce overexpenditure. We establish an equivalence between the behavior evolutionarily stable preferences induce and evolutionarily stable strategies.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 24640.

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Date of creation: 25 Aug 2010
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Handle: RePEc:pra:mprapa:24640
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  1. Michael R. Baye & Dan Kovenock & Casper G. Vries, 2005. "Comparative Analysis of Litigation Systems: An Auction-Theoretic Approach," Economic Journal, Royal Economic Society, vol. 115(505), pages 583-601, 07.
  2. Luis Corchón, 2007. "The theory of contests: a survey," Review of Economic Design, Springer;Society for Economic Design, vol. 11(2), pages 69-100, September.
  3. Garfinkel, Michelle R. & Skaperdas, Stergios, 2007. "Economics of Conflict: An Overview," Handbook of Defense Economics, Elsevier.
  4. Jack Hirshleifer, 1995. "Theorizing About Conflict," UCLA Economics Working Papers 727, UCLA Department of Economics.
  5. Nti, Kofi O, 1999. "Rent-Seeking with Asymmetric Valuations," Public Choice, Springer, vol. 98(3-4), pages 415-30, March.
  6. Kooreman, Peter & Schoonbeek, Lambert, 1997. "The specification of the probability functions in Tullock's rent-seeking contest," Economics Letters, Elsevier, vol. 56(1), pages 59-61, September.
  7. Sheremeta, Roman M., 2010. "Experimental comparison of multi-stage and one-stage contests," Games and Economic Behavior, Elsevier, vol. 68(2), pages 731-747, March.
  8. Frederik Schmidt, 2009. "Evolutionary stability of altruism and envy in Tullock contests," Economics of Governance, Springer, vol. 10(3), pages 247-259, July.
  9. Stein, William E, 2002. "Asymmetric Rent-Seeking with More Than Two Contestants," Public Choice, Springer, vol. 113(3-4), pages 325-36, December.
  10. Baye, M. & Kovenock, D. & de Vries, C., 1990. "The All-Pay Auction with Complete Information," Discussion Paper 1990-51, Tilburg University, Center for Economic Research.
  11. Baye, M.R. & Kovenock, D. & De Vries, C.G., 1992. "Rigging the Lobbying Process: An Application of the All- Pay Auction," Papers 9-92-2, Pennsylvania State - Department of Economics.
  12. Jacob K. Goeree & Emiel Maasland & Sander Onderstal & John L. Turner, 2005. "How (Not) to Raise Money," Journal of Political Economy, University of Chicago Press, vol. 113(4), pages 897-926, August.
  13. John Morgan & Henrik Orzen & Martin Sefton, 2008. "Endogenous Entry in Contests," Discussion Papers 2008-08, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  14. Erik Mohlin, 2010. "Internalized social norms in conflicts: an evolutionary approach," Economics of Governance, Springer, vol. 11(2), pages 169-181, April.
  15. Curtis Eaton & Mukesh Eswaran, 2003. "The evolution of preferences and competition: a rationalization of Veblen's theory of invidious comparisons," Canadian Journal of Economics, Canadian Economics Association, vol. 36(4), pages 832-859, November.
  16. Wolfgang Leininger, 2009. "Evolutionarily stable preferences in contests," Public Choice, Springer, vol. 140(3), pages 341-356, September.
  17. Stefan Szymanski, 2003. "The Economic Design of Sporting Contests," Journal of Economic Literature, American Economic Association, vol. 41(4), pages 1137-1187, December.
  18. Baye, Michael R. & Hoppe, Heidrun C., 2003. "The strategic equivalence of rent-seeking, innovation, and patent-race games," Games and Economic Behavior, Elsevier, vol. 44(2), pages 217-226, August.
  19. Arye L. Hillman & John G. Riley, 1989. "Politically Contestable Rents And Transfers," Economics and Politics, Wiley Blackwell, vol. 1(1), pages 17-39, 03.
  20. Farmer, Amy & Pecorino, Paul, 1999. "Legal Expenditure as a Rent-Seeking Game," Public Choice, Springer, vol. 100(3-4), pages 271-88, September.
  21. Possajennikov Alex, 2010. "On Delegation in Contests and the Survival of Payoff Maximizing Behavior," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 10(1), pages 1-13, June.
  22. Burkhard Hehenkamp & Wolfgang Leininger & Alex Possajennikov, 2003. "Evolutionary Equilibrium in Tullock Contests: Spite and Overdissipation," Discussion Papers in Economics 03_01, University of Dortmund, Department of Economics.
  23. Oliver Kirchkamp,, 2006. "Less fighting than expected — experiments with wars of attrition and all-pay auctions," CRIEFF Discussion Papers 0607, Centre for Research into Industry, Enterprise, Finance and the Firm.
  24. Benedikt Herrmann & Henrik Orzen, 2008. "The appearance of homo rivalis: Social preferences and the nature of rent seeking," Discussion Papers 2008-10, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  25. Stergios Skaperdas, 1996. "Contest success functions (*)," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 7(2), pages 283-290.
  26. Potters, Jan & de Vries, Casper G. & van Winden, Frans, 1998. "An experimental examination of rational rent-seeking," European Journal of Political Economy, Elsevier, vol. 14(4), pages 783-800, November.
  27. Kai A. Konrad, 2002. "Altruism and Envy in Contests: An Evolutionarily Stable Symbiosis," CESifo Working Paper Series 825, CESifo Group Munich.
  28. Wolfgang Leininger, 2003. "On evolutionarily stable behavior in contests," Economics of Governance, Springer, vol. 4(3), pages 177-186, November.
  29. Warneryd, Karl, 2002. "Rent, risk, and replication: Preference adaptation in winner-take-all markets," Games and Economic Behavior, Elsevier, vol. 41(2), pages 344-364, November.
  30. Hirshleifer, Jack, 1995. "Theorizing about conflict," Handbook of Defense Economics, in: Keith Hartley & Todd Sandler (ed.), Handbook of Defense Economics, edition 1, volume 1, chapter 7, pages 165-189 Elsevier.
  31. Fang, Hanming, 2002. "Lottery versus All-Pay Auction Models of Lobbying," Public Choice, Springer, vol. 112(3-4), pages 351-71, September.
  32. John Morgan, 2000. "Financing Public Goods by Means of Lotteries," Review of Economic Studies, Oxford University Press, vol. 67(4), pages 761-784.
  33. Nitzan, Shmuel, 1994. "Modelling rent-seeking contests," European Journal of Political Economy, Elsevier, vol. 10(1), pages 41-60, May.
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