Contests with dominant strategies

Beviá, Carmen; Corchón, Luı́s C.

doi:10.1007/s00199-019-01226-3

Cited by 4 publications

(4 citation statements)

References 26 publications

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“…We assume that the designer aims to minimize his worst-case regret. From this aspect, we are closely related to Hurwicz and Shapiro (1978), Schlag (2008, 2011), Renou and Schlag (2011), and Beviá and Corchón (2019). Hurwicz and Shapiro (1978) show that a 50-50 split is an optimal sharecropping contract when the optimality criterion involves the ratio of the designer's payoff to the first-best total surplus.…”

Section: Introductionmentioning

confidence: 88%

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Robust Monopoly Regulation

Guo¹,

Shmaya²

2019

Preprint

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We study the regulation of a monopolistic firm using a robust-design approach. We solve for the policy that minimizes the regulator's worst-case regret, where the regret is the difference between his complete-information payoff and his realized payoff. When the regulator's payoff is consumers' surplus, it is optimal to impose a price cap. The optimal cap balances the benefit from more surplus for consumers and the loss from underproduction. When his payoff is consumers' surplus plus the firm's profit, he offers a piece-rate subsidy in order to mitigate underproduction, but caps the total subsidy so as not to incentivize severe overproduction.

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Section: Introductionmentioning

confidence: 88%

“…Renou and Schlag (2011) apply the solution concept of ε-minimax regret to the problem of implementing social choice correspondences. Beviá and Corchón (2019) characterize contests in which contestants have dominant strategies and find within this class the contest for which the designer's worst-case regret is minimized.…”

Section: Introductionmentioning

confidence: 99%

Robust Monopoly Regulation

Guo¹,

Shmaya²

2019

Preprint

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“…Renou and Schlag (2011) applied the solution concept of ε ‐minimax‐regret to the problem of implementing social choice correspondences. Beviá and Corchón (2019) examined the contest which minimizes the designer's worst‐case regret. Malladi (2022) studied the optimal approval rules for innovation, and Guo and Shmaya (2023) studied the optimal mechanism for monopoly regulation.…”

Section: Introductionmentioning

confidence: 99%

Regret‐Minimizing Project Choice

Guo,

Shmaya

2023

ECTA

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An agent observes the set of available projects and proposes some, but not necessarily all, of them. A principal chooses one or none from the proposed set. We solve for a mechanism that minimizes the principal's worst‐case regret. We compare the single‐project environment in which the agent can propose only one project with the multiproject environment in which he can propose many. In both environments, if the agent proposes one project, it is chosen for sure if the principal's payoff is sufficiently high; otherwise, the probability that it is chosen decreases in the agent's payoff. In the multiproject environment, the agent's payoff from proposing multiple projects equals his maximal payoff from proposing each project alone. The multiproject environment outperforms the single‐project one by providing better fallback options than rejection and by delivering this payoff to the agent more efficiently.

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“…Che and Gale (2000) derived conditions under which the mixed equilibria of the individual difference-form contest converges to the one of the all-pay auction under complete information. 4 Probabilistic difference-form contest success functions have been micro-founded using non-cooperative games (Gersbach and Haller 2009;Corchón and Dahm 2010), through mechanism design (Corchón and Dahm 2011;Polishchuk and Tonis 2013;Beviá and Corchón 2019) and in a Bayesian framework (Skaperdas and Vaidya 2012). 5 Baik (1998) and Che and Gale (2000) were among the first to study two-player probabilistic differenceform contests.…”

Section: Introductionmentioning

confidence: 99%

Difference-form group contests

Cubel

Sánchez‐Pagés

2022

Rev Econ Design

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This paper is the first to study difference-form group contests, that is, contests fought among groups where their probability of victory depends on the absolute difference of their effective efforts. We show that key equilibrium variables in these contests can be expressed as a function of a modified version of the Watts poverty index. We use the properties of this index to study the impact of heterogeneity, both within and between groups. In the case of homogeneous groups, we show that multiple groups can be active in equilibrium and that more groups are active and aggregate effort is higher the more similar their valuations of victory are. We then characterize equilibria under heterogeneous groups. We show that within-group heterogeneity is typically detrimental to the success of a group in the contest. Groups may have an incentive to become more homogeneous in order to increase their chances of victory.

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Contests with dominant strategies

Cited by 4 publications

References 26 publications

Robust Monopoly Regulation

Robust Monopoly Regulation

Regret‐Minimizing Project Choice

Difference-form group contests

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