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Multiple equilibria in Tullock contests

Author

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  • Subhashish Modak Chowdhury

    (School of Economics and CBESS, University of East Anglia)

  • Roman M. Sheremeta

    (Argyros School of Business and Economics, Chapman University)

Abstract

We find the sufficient conditions for the existence of multiple equilibria in Tullock-type contests and show that asymmetric equilibria may arise even under symmetric prize and cost structures. We also identify contests in the literature where multiple equilibria exist under reasonably weak conditions.

Suggested Citation

  • Subhashish Modak Chowdhury & Roman M. Sheremeta, 2010. "Multiple equilibria in Tullock contests," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 10-12, School of Economics, University of East Anglia, Norwich, UK..
  • Handle: RePEc:uea:wcbess:10-12
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    References listed on IDEAS

    as
    1. 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.
    2. Subhasish Chowdhury & Roman Sheremeta, 2011. "A generalized Tullock contest," Public Choice, Springer, vol. 147(3), pages 413-420, June.
    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. 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, July.
    5. Christian Riis & Derek J. Clark, 1997. "Contest success functions: an extension," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 11(1), pages 201-204.
    6. Amegashie, J Atsu, 1999. "The Number of Rent-Seekers and Aggregate Rent-Seeking Expenditures: An Unpleasant Result," Public Choice, Springer, vol. 99(1-2), pages 57-62, April.
    7. Paul, Chris & Wilhite, Al, 1990. "Efficient Renk-Seeking under Varying Cost Structures," Public Choice, Springer, vol. 64(3), pages 279-290, March.
    8. Nti, Kofi O, 1999. "Rent-Seeking with Asymmetric Valuations," Public Choice, Springer, vol. 98(3-4), pages 415-430, March.
    9. Matros, Alexander, 2012. "Sad-Loser contests," Journal of Mathematical Economics, Elsevier, vol. 48(3), pages 155-162.
    10. Szidarovszky, Ferenc & Okuguchi, Koji, 1997. "On the Existence and Uniqueness of Pure Nash Equilibrium in Rent-Seeking Games," Games and Economic Behavior, Elsevier, vol. 18(1), pages 135-140, January.
    11. Cohen, Chen & Sela, Aner, 2005. "Manipulations in contests," Economics Letters, Elsevier, vol. 86(1), pages 135-139, January.
    12. Alexander Matros & Daniel Armanios, 2009. "Tullock’s contest with reimbursements," Public Choice, Springer, vol. 141(1), pages 49-63, October.
    13. Glazer, Amihai & Konrad, Kai A., 1999. "Taxation of rent-seeking activities," Journal of Public Economics, Elsevier, vol. 72(1), pages 61-72, April.
    14. Stergios Skaperdas, 1996. "Contest success functions (*)," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 7(2), pages 283-290.
    15. Takeshi Yamazaki, 2008. "On the Existence and Uniqueness of Pure-Strategy Nash Equilibrium in Asymmetric Rent-Seeking Contests," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 10(2), pages 317-327, April.
    16. repec:pit:wpaper:328 is not listed on IDEAS
    17. Mark Gradstein, 1995. "Intensity Of Competition, Entry And Entry Deterrence In Rent Seeking Contests," Economics and Politics, Wiley Blackwell, vol. 7(1), pages 79-91, March.
    18. repec:pit:wpaper:204 is not listed on IDEAS
    19. 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.
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    Cited by:

    1. Matros, Alexander, 2012. "Sad-Loser contests," Journal of Mathematical Economics, Elsevier, vol. 48(3), pages 155-162.
    2. Emmanuel Dechenaux & Dan Kovenock & Roman Sheremeta, 2015. "A survey of experimental research on contests, all-pay auctions and tournaments," Experimental Economics, Springer;Economic Science Association, vol. 18(4), pages 609-669, December.
    3. J. Atsu Amegashie, 2012. "A Nested Contest: Tullock Meets the All-Pay Auction," Working Papers 1211, University of Guelph, Department of Economics and Finance.
    4. Ezra Einy & Ori Haimanko & Diego Moreno & Aner Sela & Benyamin Shitovitz, 2013. "Tullock Contests With Asymmetric Information," Working Papers 1303, Ben-Gurion University of the Negev, Department of Economics.
    5. Balart, Pau & Chowdhury, Subhasish M. & Troumpounis, Orestis, 2017. "Linking individual and collective contests through noise level and sharing rules," Economics Letters, Elsevier, vol. 155(C), pages 126-130.
    6. Subhasish Chowdhury & Roman Sheremeta, 2015. "Strategically equivalent contests," Theory and Decision, Springer, vol. 78(4), pages 587-601, April.
    7. A. Aiche & Ezra Einy & Aner Sela & Ori Haimanko & Diego Moreno & B. Shitovitz, 2017. "Information In Tullock Contests," Working Papers 1710, Ben-Gurion University of the Negev, Department of Economics.
    8. Derek Clark & Tore Nilssen, 2013. "Learning by doing in contests," Public Choice, Springer, vol. 156(1), pages 329-343, July.
    9. Roman M. Sheremeta, 2013. "Overbidding And Heterogeneous Behavior In Contest Experiments," Journal of Economic Surveys, Wiley Blackwell, vol. 27(3), pages 491-514, July.
    10. Roman M. Sheremeta, 2014. "Behavioral Dimensions of Contests," Working Papers 14-14, Chapman University, Economic Science Institute.
    11. repec:uea:wcbess:13-08 is not listed on IDEAS
    12. Amegashie, J. Atsu, 2012. "A nested contest: Tullock meets the All-Pay Auction," MPRA Paper 41654, University Library of Munich, Germany, revised 03 Sep 2012.
    13. Shupp, Robert & Sheremeta, Roman M. & Schmidt, David & Walker, James, 2013. "Resource allocation contests: Experimental evidence," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 257-267.
    14. Hargreaves Heap, Shaun P. & Ramalingam, Abhijit & Ramalingam, Siddharth & Stoddard, Brock V., 2015. "‘Doggedness’ or ‘disengagement’? An experiment on the effect of inequality in endowment on behaviour in team competitions," Journal of Economic Behavior & Organization, Elsevier, vol. 120(C), pages 80-93.
    15. Aner Sela & Ezra Einy & 0ri Haimanko & Diego Moreno & Avishay Aiche & Benyamin Shitovitz, 2016. "Information Advantage in Common-Value Classic Tullock Contests," Working Papers 1614, Ben-Gurion University of the Negev, Department of Economics.
    16. Grossmann, Martin & Dietl, Helmut, 2015. "Heterogeneous outside options in contests," European Journal of Political Economy, Elsevier, vol. 37(C), pages 280-287.
    17. Chowdhury, Subhasish M. & Lee, Dongryul & Sheremeta, Roman M., 2013. "Top guns may not fire: Best-shot group contests with group-specific public good prizes," Journal of Economic Behavior & Organization, Elsevier, vol. 92(C), pages 94-103.
    18. Adriana Gama & David Michael Rietzke, 2017. "Robust Comparative Statics in Contests," Working Papers 173174403, Lancaster University Management School, Economics Department.
    19. Curtis R. Price & Roman M. Sheremeta, 2015. "Endowment Origin, Demographic Effects, and Individual Preferences in Contests," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 24(3), pages 597-619, September.
    20. Sean P. Hargreaves Heap & Abhijit Ramalingam & Siddharth Ramalingam & Brock V. Stoddard, 2015. "‘Doggedness’ or ‘disengagement’? An experiment on the effect of inequality in endowment on behaviour in team competitions," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 13-08-R, School of Economics, University of East Anglia, Norwich, UK..
    21. Sheremeta, Roman, 2014. "Behavior in Contests," MPRA Paper 57451, University Library of Munich, Germany.
    22. repec:eee:pubeco:v:150:y:2017:i:c:p:30-38 is not listed on IDEAS
    23. Subhasish M. Chowdhury & Anwesha Mukherjee & Theodore L. Turocy, 2016. "That's the ticket: Explicit lottery randomisation and learning in Tullock contests," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 16-07, School of Economics, University of East Anglia, Norwich, UK..

    More about this item

    Keywords

    rent-seeking; contest; asymmetric equilibrium; multiple equilibria;

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • 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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