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Top Guns May Not Fire: Best-Shot Group Contests with Group-Specific Public Good Prizes

Listed author(s):
  • Chowdhury, Subhasish
  • Lee, Dongryul
  • Sheremeta, Roman

We analyze a group contest in which n groups compete to win a group-specific public good prize. Group sizes can be different and any player may value the prize differently within and across groups. Players exert costly efforts simultaneously and independently. Only the highest effort (the best-shot) within each group represents the group effort that determines the winning group. We fully characterize the set of equilibria and show that in any equilibrium at most one player in each group exerts strictly positive effort. There always exists an equilibrium in which only the highest value player in each active group exerts strictly positive effort. However, perverse equilibria may exist in which the highest value players completely free-ride on others by exerting no effort. We provide conditions under which the set of equilibria can be restricted and discuss contest design implications.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 46654.

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Date of creation: 27 Apr 2013
Handle: RePEc:pra:mprapa:46654
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  1. Klaus Abbink & Jordi Brandts & Benedikt Herrmann & Henrik Orzen, 2007. "Inter-Group Conflict and Intra-Group Punishment in an Experimental Contest Game," Discussion Papers 2007-15, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
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  4. Sheremeta, Roman & Zhang, Jingjing, 2009. "Can Groups Solve the Problem of Over-Bidding in Contests?," MPRA Paper 49885, University Library of Munich, Germany.
  5. Dechenaux, Emmanuel & Kovenock, Dan & Sheremeta, Roman, 2014. "A Survey of Experimental Research on Contests, All-Pay Auctions and Tournaments," MPRA Paper 59714, University Library of Munich, Germany.
  6. Subhasish M. Chowdhury & Roman M. Sheremeta, 2010. "Multiple Equilibria in Tullock Contests," University of East Anglia Applied and Financial Economics Working Paper Series 014, School of Economics, University of East Anglia, Norwich, UK..
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  12. Roman Sheremeta & Jingjing Zhang, 2010. "Can groups solve the problem of over-bidding in contests?," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 35(2), pages 175-197, July.
  13. Baik, Kyung Hwan, 1993. "Effort levels in contests : The public-good prize case," Economics Letters, Elsevier, vol. 41(4), pages 363-367.
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  24. Deck, Cary & Sheremeta, Roman, 2012. "Fight or Flight?," MPRA Paper 52130, University Library of Munich, Germany.
  25. Ahn, T.K. & Isaac, R. Mark & Salmon, Timothy C., 2011. "Rent seeking in groups," International Journal of Industrial Organization, Elsevier, vol. 29(1), pages 116-125, January.
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