Sequential contests with first and secondary prizes

Asaf Iluz; Aner Sela

doi:10.1016/j.econlet.2018.06.029

Sequential contests with first and secondary prizes

Asaf Iluz, Aner Sela

Department of Economics

Ben-Gurion University of the Negev

Research output: Contribution to journal › Article › peer-review

Abstract

We study a sequential two-stage Tullock contest with two asymmetric players. The players compete for two prizes; the player with the highest effort in the first stage wins the secondary prize while the player with the highest total effort in both stages wins the first prize. Both players have the same cost functions where the marginal cost in the first stage is higher than in the second one. We analyze the subgame perfect equilibrium of this contest and reveal a paradoxical behavior such that the players’ utilities increase in their marginal effort cost.

Original language	American English
Pages (from-to)	6-9
Number of pages	4
Journal	Economics Letters
Volume	171
DOIs	https://doi.org/10.1016/j.econlet.2018.06.029
State	Published - 1 Oct 2018

Keywords

Multi-prize contests
Multi-stage contests
Variable costs

All Science Journal Classification (ASJC) codes

Finance
Economics and Econometrics

Access to Document

10.1016/j.econlet.2018.06.029

Cite this

@article{e25c9555f4a548299f9c23c9b27ba5eb,

title = "Sequential contests with first and secondary prizes",

abstract = "We study a sequential two-stage Tullock contest with two asymmetric players. The players compete for two prizes; the player with the highest effort in the first stage wins the secondary prize while the player with the highest total effort in both stages wins the first prize. Both players have the same cost functions where the marginal cost in the first stage is higher than in the second one. We analyze the subgame perfect equilibrium of this contest and reveal a paradoxical behavior such that the players{\textquoteright} utilities increase in their marginal effort cost.",

keywords = "Multi-prize contests, Multi-stage contests, Variable costs",

author = "Asaf Iluz and Aner Sela",

note = "Publisher Copyright: {\textcopyright} 2018",

year = "2018",

month = oct,

day = "1",

doi = "10.1016/j.econlet.2018.06.029",

language = "American English",

volume = "171",

pages = "6--9",

journal = "Economics Letters",

issn = "0165-1765",

publisher = "Elsevier B.V.",

}

TY - JOUR

T1 - Sequential contests with first and secondary prizes

AU - Iluz, Asaf

AU - Sela, Aner

PY - 2018/10/1

Y1 - 2018/10/1

N2 - We study a sequential two-stage Tullock contest with two asymmetric players. The players compete for two prizes; the player with the highest effort in the first stage wins the secondary prize while the player with the highest total effort in both stages wins the first prize. Both players have the same cost functions where the marginal cost in the first stage is higher than in the second one. We analyze the subgame perfect equilibrium of this contest and reveal a paradoxical behavior such that the players’ utilities increase in their marginal effort cost.

AB - We study a sequential two-stage Tullock contest with two asymmetric players. The players compete for two prizes; the player with the highest effort in the first stage wins the secondary prize while the player with the highest total effort in both stages wins the first prize. Both players have the same cost functions where the marginal cost in the first stage is higher than in the second one. We analyze the subgame perfect equilibrium of this contest and reveal a paradoxical behavior such that the players’ utilities increase in their marginal effort cost.

KW - Multi-prize contests

KW - Multi-stage contests

KW - Variable costs

UR - http://www.scopus.com/inward/record.url?scp=85049456673&partnerID=8YFLogxK

U2 - 10.1016/j.econlet.2018.06.029

DO - 10.1016/j.econlet.2018.06.029

M3 - Article

SN - 0165-1765

VL - 171

SP - 6

EP - 9

JO - Economics Letters

JF - Economics Letters

ER -

Sequential contests with first and secondary prizes

Abstract

Keywords

All Science Journal Classification (ASJC) codes

Access to Document

Other files and links

Fingerprint

Cite this