Hybrid All-Pay and Winner-Pay Contests
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- mic.20180107
Final published version, 741 KB, PDF document
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.
Original language | English |
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Journal | American Economic Journal: Microeconomics |
Volume | 12 |
Issue number | 4 |
Pages (from-to) | 144-169 |
Number of pages | 26 |
ISSN | 1945-7669 |
DOIs | |
Publication status | Published - Nov 2020 |
- RENT-SEEKING, DESIGN, SABOTAGE
Research areas
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ID: 254995848