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Sharing contests with general preferences

Author

Listed:
  • Alex Dickson

    (Department of Economics, University of Strathclyde, Glasgow, UK, G4 0QU)

  • Ian A. MacKenzie

    (School of Economics, University of Queensland, Brisbane, Australia, 4072)

  • Petros G. Sekeris

    (Montpellier Business School, Montpellier, France)

Abstract

This article investigates contests when heterogeneous players compete to obtain a rent share. We prove the existence and uniqueness of the Nash equilibrium when players have general preferences. Our results show that the conventional wisdom in contests-such as a monotonically increasing relationship between effort and the size of the rent-may no longer hold. We derive the key conditions on preferences under which this is the case. By providing a much broader contest environment, our approach is able to nest conventional contest analysis as well as providing a rich framework that helps to explain many previously puzzling applications.

Suggested Citation

  • Alex Dickson & Ian A. MacKenzie & Petros G. Sekeris, 2016. "Sharing contests with general preferences," Discussion Papers Series 573, School of Economics, University of Queensland, Australia.
  • Handle: RePEc:qld:uq2004:573
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    File URL: http://www.uq.edu.au/economics/abstract/573.pdf
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    References listed on IDEAS

    as
    1. Brunnschweiler, Christa N. & Bulte, Erwin H., 2008. "The resource curse revisited and revised: A tale of paradoxes and red herrings," Journal of Environmental Economics and Management, Elsevier, vol. 55(3), pages 248-264, May.
    2. Chung, Tai-Yeong, 1996. "Rent-Seeking Contest When the Prize Increases with Aggregate Efforts," Public Choice, Springer, vol. 87(1-2), pages 55-66, April.
    3. Richard Cornes & Roger Hartley, 2005. "Asymmetric contests with general technologies," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 26(4), pages 923-946, November.
    4. Konrad, Kai A., 2009. "Strategy and Dynamics in Contests," OUP Catalogue, Oxford University Press, number 9780199549603.
    5. Roger D. Congleton & Arye L. Hillman (ed.), 2015. "Companion to the Political Economy of Rent Seeking," Books, Edward Elgar Publishing, number 15325.
    6. Dickson, Alex & Hartley, Roger, 2008. "The strategic Marshallian cross," Games and Economic Behavior, Elsevier, vol. 64(2), pages 514-532, November.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    contest; general preferences; aggregative game;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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