Hybrid All-Pay and Winner-Pay Contests

Research output: Contribution to journalJournal articlepeer-review

Standard

Hybrid All-Pay and Winner-Pay Contests. / Lagerlöf, Johan N. M.

In: American Economic Journal: Microeconomics, Vol. 12, No. 4, 11.2020, p. 144-169.

Research output: Contribution to journalJournal articlepeer-review

Harvard

Lagerlöf, JNM 2020, 'Hybrid All-Pay and Winner-Pay Contests', American Economic Journal: Microeconomics, vol. 12, no. 4, pp. 144-169. https://doi.org/10.1257/mic.20180107

APA

Lagerlöf, J. N. M. (2020). Hybrid All-Pay and Winner-Pay Contests. American Economic Journal: Microeconomics, 12(4), 144-169. https://doi.org/10.1257/mic.20180107

Vancouver

Lagerlöf JNM. Hybrid All-Pay and Winner-Pay Contests. American Economic Journal: Microeconomics. 2020 Nov;12(4):144-169. https://doi.org/10.1257/mic.20180107

Author

Lagerlöf, Johan N. M. / Hybrid All-Pay and Winner-Pay Contests. In: American Economic Journal: Microeconomics. 2020 ; Vol. 12, No. 4. pp. 144-169.

Bibtex

@article{96e1883cf1f34687a8a45eb3dd64972e,
title = "Hybrid All-Pay and Winner-Pay Contests",
abstract = "In many contests in economic and political life, both all-pay and winner-pay expenditures matter for winning. This paper studies such hybrid contests under symmetry and asymmetry. The symmetric model assumes very little structure but yields a simple closed-form solution. More contestants tend to lead to substitution toward winner-pay investments, and total expenditures are always lower than in the corresponding all-pay contest. With a biased decision process and two contestants, the favored contestant wins with a higher likelihood, chooses less winner-pay investments, and contributes more to total expenditures. An endogenous bias that maximizes total expenditures disfavors the high-valuation contestant but still makes her the more likely one to win.",
keywords = "RENT-SEEKING, DESIGN, SABOTAGE",
author = "Lagerl{\"o}f, {Johan N. M.}",
year = "2020",
month = nov,
doi = "10.1257/mic.20180107",
language = "English",
volume = "12",
pages = "144--169",
journal = "American Economic Journal: Microeconomics",
issn = "1945-7669",
publisher = "American Economic Association",
number = "4",

}

RIS

TY - JOUR

T1 - Hybrid All-Pay and Winner-Pay Contests

AU - Lagerlöf, Johan N. M.

PY - 2020/11

Y1 - 2020/11

N2 - In many contests in economic and political life, both all-pay and winner-pay expenditures matter for winning. This paper studies such hybrid contests under symmetry and asymmetry. The symmetric model assumes very little structure but yields a simple closed-form solution. More contestants tend to lead to substitution toward winner-pay investments, and total expenditures are always lower than in the corresponding all-pay contest. With a biased decision process and two contestants, the favored contestant wins with a higher likelihood, chooses less winner-pay investments, and contributes more to total expenditures. An endogenous bias that maximizes total expenditures disfavors the high-valuation contestant but still makes her the more likely one to win.

AB - In many contests in economic and political life, both all-pay and winner-pay expenditures matter for winning. This paper studies such hybrid contests under symmetry and asymmetry. The symmetric model assumes very little structure but yields a simple closed-form solution. More contestants tend to lead to substitution toward winner-pay investments, and total expenditures are always lower than in the corresponding all-pay contest. With a biased decision process and two contestants, the favored contestant wins with a higher likelihood, chooses less winner-pay investments, and contributes more to total expenditures. An endogenous bias that maximizes total expenditures disfavors the high-valuation contestant but still makes her the more likely one to win.

KW - RENT-SEEKING

KW - DESIGN

KW - SABOTAGE

U2 - 10.1257/mic.20180107

DO - 10.1257/mic.20180107

M3 - Journal article

VL - 12

SP - 144

EP - 169

JO - American Economic Journal: Microeconomics

JF - American Economic Journal: Microeconomics

SN - 1945-7669

IS - 4

ER -

ID: 254995848