Contests: Theory and Topics

Abstract

Competitive situations resembling contests are ubiquitous in modern economic landscape. In a contest, economic agents expend costly effort to vie for limited prizes, and they are rewarded for “getting ahead” of their opponents instead of their absolute performance metrics. Many social, economic, and business phenomena exemplify such competitive schemes, ranging from college admissions, political campaigns, advertising, and organizational hierarchies, to warfare. The economics literature has long recognized contest/tournament as a convenient and efficient incentive scheme to remedy the moral hazard problem, especially when the production process is subject to random perturbation or the measurement of input/output is imprecise or costly. An enormous amount of scholarly effort has been devoted to developing tractable theoretical models, unveiling the fundamentals of the strategic interactions that underlie such competitions, and exploring the optimal design of contest rules. This voluminous literature has enriched basic contest/tournament models by introducing different variations to the modeling, such as dynamic structure, incomplete and asymmetric information, multi-battle confrontations, sorting and entry, endogenous prize allocation, competitions in groups, contestants with alternative risk attitude, among other things.

How Election Process is Rent-Seeking in Pakistan? A Case Study of Local Bodies Election in District Pakpattan

“…To our knowledge, the literature on election campaigns mostly discusses the relationship between campaigning cost and votes gained (see, for example, Ansolabehere & Snyder, 1996;Goldstein & Freedman, 2000). In addition, we find literature related to political contests for rents and transfer (Hillman & Riley, 1989;Fu & Wu, 2019). However, there is a lack of empirical analysis related to how political contest through the process of election campaigning becomes a transfer cost for the allocation of developmental funds.…”

Modelling behaviour in intergroup conflicts: a review of microeconomic approaches

“…Extensive overviews of theoretical work are provided, e.g. by references [23–27]. References [28,29], furthermore, survey the results of empirical tests of such contest models’ predictions.…”

A General Framework for Studying Contests

“…1 The theoretical contest literature has been surveyed in a number of books and papers. See, e.g., Konrad (2009) and Vojnović (2015) for recent textbooks and Chowdhury & Gürtler (2015), Chowdhury et al (2019), and Fu & Wu (2019) for recent surveys.…”