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Axiomatizing Multi-Prize Nested Lottery Contests: A Complete and Strict Ranking Perspective

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  • Jingfeng Lu

    (Department of Economics, National University of Singapore)

  • Zhewei Wang

    (School of Economics, Shandong University)

Abstract

Multiple prizes are usually awarded in contests (e.g., internal promotions, school admissions, sports, etc.) and players exert effort to increase their chances for winning a higher prize. A multi-prize contest model must provide each player's probabilities of winning each prize as functions of all players' efforts. We find that the key notion of "hypothetical subcontests" in the contest axiomatization literature initiated by Skaperdas (1996) can be appropriately interpreted and precisely defined from a ranking perspective, as well as the relevant axioms of "Subcontest Consistency" and "Independence of Irrelevant Contestants" (IIC). When there are less than four contestants (exclusive), a set of axioms properly adapted from those in Skaperdas (1996) and Clark and Riis (1998a) are sufficient and necessary for axiomatizing the widely adopted multi-prize nested lottery contest of Clark and Riis (1996a). When there are more than four contestants (inclusive), including a new axiom of "Independence of Irrelevant Ranks" (IIR) is necessary and sufficient.

Suggested Citation

  • Jingfeng Lu & Zhewei Wang, 2015. "Axiomatizing Multi-Prize Nested Lottery Contests: A Complete and Strict Ranking Perspective," SDU Working Papers 2015-01, School of Economics, Shandong University.
    • Handle: RePEc:shn:wpaper:2015-01
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    References listed on IDEAS

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    Cited by:

    1. Lu, Jingfeng & Lu, Yuanzhu & Wang, Zhewei & Zhou, Lixue, 2022. "Winner-leave versus loser-leave in multi-stage nested Tullock contests," Games and Economic Behavior, Elsevier, vol. 132(C), pages 337-352.
    2. Kjell Hausken, 2023. "Two-period Colonel Blotto contest with cumulative investments over variable assets with resource constraints," SN Business & Economics, Springer, vol. 3(11), pages 1-18, November.
    3. Fu, Qiang & Wu, Zenan & Zhu, Yuxuan, 2023. "On equilibrium uniqueness in generalized multi-prize nested lottery contests," Games and Economic Behavior, Elsevier, vol. 139(C), pages 180-199.
    4. Lu, Jingfeng & Shen, Bo & Wang, Zhewei, 2017. "Optimal contest design under reverse-lottery technology," Journal of Mathematical Economics, Elsevier, vol. 72(C), pages 25-35.
    5. Kjell Hausken, 2021. "Axiomatizing additive multi-effort contests," SN Business & Economics, Springer, vol. 1(11), pages 1-12, November.
    6. Jingfeng Lu & Zhewei Wang, 2016. "Axiomatization of reverse nested lottery contests," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 47(4), pages 939-957, December.
    7. Bozbay, Irem & Vesperoni, Alberto, 2018. "A contest success function for networks," Journal of Economic Behavior & Organization, Elsevier, vol. 150(C), pages 404-422.
    8. Alberto Vesperoni & Anıl Yıldızparlak, 2019. "Inequality and conflict outbreak," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 53(1), pages 135-173, June.
    9. Fu, Qiang & Wang, Xiruo & Wu, Zenan, 2021. "Multi-prize contests with risk-averse players," Games and Economic Behavior, Elsevier, vol. 129(C), pages 513-535.
    10. Fu, Qiang & Wu, Zenan & Zhu, Yuxuan, 2022. "On equilibrium existence in generalized multi-prize nested lottery contests," Journal of Economic Theory, Elsevier, vol. 200(C).
    11. Jingfeng Lu & Zhewei Wang & Lixue Zhou, 2023. "Nested Tullock contests with nonmonotone prizes," International Journal of Game Theory, Springer;Game Theory Society, vol. 52(1), pages 303-332, March.
    12. Christian Ewerhart, 2015. "Contest success functions: the common-pool perspective," ECON - Working Papers 195, Department of Economics - University of Zurich.

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    More about this item

    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
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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