Difference-form group contests

M Cubel, Santiago Sanchez-Pages

Research output: Contribution to journalArticlepeer-review

1 Citation (SciVal)

Abstract

This paper is the first to study difference-form group contests, that is, contests fought among groups where their probability of victory depends on the absolute difference of their effective efforts. We show that key equilibrium variables in these contests can be expressed as a function of a modified version of the Watts poverty index. We use the properties of this index to study the impact of heterogeneity, both within and between groups. In the case of homogeneous groups, we show that multiple groups can be active in equilibrium and that more groups are active and aggregate effort is higher the more similar their valuations of victory are. We then characterize equilibria under heterogeneous groups. We show that within-group heterogeneity is typically detrimental to the success of a group in the contest. Groups may have an incentive to become more homogeneous in order to increase their chances of victory.

Original languageEnglish
JournalReview of Economic Design
Early online date5 Sept 2022
DOIs
Publication statusE-pub ahead of print - 5 Sept 2022

Keywords

  • Contest success function
  • Contests
  • Groups
  • Heterogeneity

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

Fingerprint

Dive into the research topics of 'Difference-form group contests'. Together they form a unique fingerprint.

Cite this