Persuasion as a contest

Contests are situations in which a set of agents compete for a valuable object, rent or award. The present paper analyzes difference-form group contests, that is, contests fought among groups and where their probability of victory depends on the difference of their effective efforts. First, we show that the non-existence of pure-strategy equilibria and the monopolization results obtained in previous analysis of difference-form contests rest critically on the assumption of a linear cost of effort. Under exponential costs, we show that pure strategy equilibria exist in a large set of cases and that more than one group can expend positive effort in equilibrium. Second, we show that inequality of valuations of victory within groups hinders their chances of prevailing in the contest. If possible; members may find beneficial to engage in progressive redistribution within their group.JEL Codes: D31, D63, D72, D74

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“…Similar CSFs are microfounded in Corchón and Dahm (2010), Skaperdas and Vaidya (2012) and Polishchuk and Tonis (2013).…”

Section: The Contest Gamementioning

confidence: 73%

Difference-Form Group Contests

2014

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“…Willingness to Pay Function The first dimension of the agent's effort can be viewed as product information presented to persuade the customer into a purchase (Skaperdas and Vaidya 2007). As the customer enters the store, she has a certain willingness to pay (WTP) for the product, which is normalized to zero.…”

Section: Stage Game With No Exitmentioning

confidence: 99%

Why are Some Salespeople More Aggressive than Others?

Franz

2014

Atl Econ J

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Why are salespeople in certain industries (such as cars and mattresses) aggressive, while their counterparts in other industries (such as luxury boutiques) relatively customer-oriented? Using a principal-agent-customer model, this paper demonstrates that the level of salesperson aggressiveness depends on: (1) the proportion of customers with a high willingness to pay; (2) whether or not customers are wellinformed and (3) repeat customers. If the proportion of customers with a high willingness to pay is relatively large, then salespeople tend to be customer-oriented. By contrast, if the proportion of customers with a high willingness to pay is relatively small, then salespeople tend to be aggressive toward uninformed customers while wellinformed customers shun the store. Finally, if the proportion of customers with a high willingness to pay is relatively small, then in an infinitely repeated game, the agent can close sales with well-informed customers without being aggressive, provided that the principal is patient enough about future profit.

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“…Skaperdas and Vaidya (2012) model persuasion, such as that arising in advertising, litigation, and argumentation in policy debates, as a contest. They derive different contest success functions used in the literature, including special cases of those used by Lazear and Rosen (1981) and Rosen (1986), as the result of inferential processes of an audience observing the costly presentation of evidence by adversaries.…”

Section: Introductionmentioning

confidence: 99%

Introduction

Konrad

Kovenock

2012

Econ Theory

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. The workshop brought together 25 scholars from around the world to present and discuss 14 papers over a period of two days. We are grateful to CESifo and to its president and chief executive officer, Hans Werner Sinn, for funding the workshop and for the organizational support provided by Karin Fournier and Deirdre Hall.The conference program included pure and applied theoretical contributions, as well as experimental tests of theory. The ten papers in this symposium are a strict subset of the papers presented, each revised based upon the comments of the conference discussants and the anonymous reviewers in the regular editorial process.The first four of these papers present extensions of several fundamental contest models to address, respectively, risk aversion, incomplete information, richer prize structures, and externalities from bids. The first, by Cornes and Hartley (2012), examines

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Persuasion as a contest

Cited by 53 publications

References 53 publications

Difference-Form Group Contests

Difference-Form Group Contests

Why are Some Salespeople More Aggressive than Others?

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