Burning Out in Sequential Elimination Contests

Symmetric two-stage contests with budget constraints

“…Amegashie (2003) has considered a two-stage contest with a budget constraint. By changing the way the winner was selected, it was possible to obtain an equilibrium with all players spending their entire budget on stage 1.…”

“…In recent years interest has turned to two-stage contests (Amegashie, 1999(Amegashie, , 2000(Amegashie, , 2003Baik & Kim, 1997;Baik & Lee, 2000;Baik & Shogren, 1995;Clark & Riis, 1996;Gradstein, 1998;Gradstein & Konrad, 1999;Higgins, Shughart & Tollison, 1985;Katz & Tokatlidu, 1996). As pointed out by Amegashie (1999) and Baik and Lee (2000), many rent-seeking contests consist of multiple stages.…”

“…Candidates in political competitions (e.g., state governorship) do not spend their entire budget to win the nomination of their party, but, rather, save a fraction of their budget for the inter-party competition. Using different models from the ones we present in this article, the effects of budget constraints on expenditures have been studied by Gale (1997, 1998) and Gavious, Moldovanu and Sela (2002) in the context of single-stage contests, and more recently by Amegashie (2003) in the context of two-stage contests, where the contest on the first stage takes an all-pay form.…”

Competitive Burnout: Theory and Experimental Evidence

“…In Amegashie (2004), the following game is presented. Consider N 3 risk-neutral agents contesting for a prize with valuations commonly known to be…”

“…In a sequential elimination contest with such a constraint, it may be rational for contestants to expend all their efforts in earlier stages, thus burning out and having nothing left to offer in subsequent stages. Amegashie (2004) shows that under certain conditions burning out in this manner may be equilibrium-consistent rational behavior even though the ultimate prize is won only if a contestant is successful in all stages including the final one.…”