Reimbursement as a tool to reduce sabotaging in rent‐seeking contests

Minchuk, Yizhaq

doi:10.1002/mde.3228

Cited by 6 publications

(5 citation statements)

References 15 publications

(35 reference statements)

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“…, decreases with the increase of those efforts. There are a few examples where decreasing the probability of winning results in higher efforts, for example, a contest with sabotaging (for more details see Konrad, 2000;Minchuk, 2021). Additionally, the effort results above are in contradiction to those for standard Tullock contests that have a no-win parameter which decreases with respect to s (Nti, 1997).…”

Section: The Main Resultsmentioning

confidence: 91%

“…The intuition gained from this is a no‐win parameter reduces the effectiveness of contestants' efforts by decreasing the probability of winning the contest, so contestants will increase their efforts aiming to reduce the likelihood of that outcome, the probability of a no‐win,

\frac{s}{true \sum_{j = 1}^{n} x_{j} + s}

, decreases with the increase of those efforts. There are a few examples where decreasing the probability of winning results in higher efforts, for example, a contest with sabotaging (for more details see Konrad, 2000; Minchuk, 2021). Additionally, the effort results above are in contradiction to those for standard Tullock contests that have a no‐win parameter which decreases with respect to s (Nti, 1997).…”

Section: The Main Resultsmentioning

confidence: 99%

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Winner‐pay contests with a no‐winner possibility

Minchuk

2021

Manage Decis Econ

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We study winner‐pay Tullock contests with a no‐win parameter that reflects the likelihood that nobody will win the contest, in a symmetric model with complete information. We show that in contradiction to standard Tullock contests with a no‐win parameter, the increase in the no‐win parameter results in higher efforts. Additionally, a no‐win parameter will result in lower revenues for the contest designer and lower contestants profits than standard winner‐pay contests. We additionally extended our work to the asymmetric case and equivalent contests.

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Section: The Main Resultsmentioning

confidence: 91%

\frac{s}{true \sum_{j = 1}^{n} x_{j} + s}

Section: The Main Resultsmentioning

confidence: 99%

Winner‐pay contests with a no‐winner possibility

Minchuk

2021

Manage Decis Econ

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“…Proof In the symmetric case, the designer's revenue equals the effort level (Matros & Armanios, 2009; Minchuk, 2021; 2022a). Thus,

R_{s t} = \frac{false(n - 1 false) V}{2 n - 1} < V = R_{n} .

□…”

Section: A Yardstick In Winner‐pay Contestsmentioning

confidence: 99%

The yardstick approach in a Tullock contest

Minchuk

2024

Manage Decis Econ

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A contest's organizational structure or mechanism is often determined by the organizer's goal. While most contest organizers are interested in maximizing the effort expended by the contestants, some are interested in maximizing social welfare. We examine the corresponding contest mechanisms using a Tullock contest (standard and winner‐pay) combined with the yardstick approach, which in some cases can achieve both goals simultaneously. Two cases are considered. The first is the yardstick approach that takes the form of a payoff scheme in a standard Tullock contest where the contestants (winners or losers) are reimbursed according to the average effort of the other contestants. In the second, the yardstick approach is introduced into a winner‐pay contest, in which the winner pays the average cost of the other contestants' efforts.

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“…Epstein and Hefeker (2003) considerrentseekingreinforcedmultiplicativelywithasecondeffort. Minchuk(2021)analyzeshow reimbursementmayreducesabotageincontests.Combinedrentseekingandsabotageeffortsare analyzedbyKonrad (2000), Chen(2003), Krakel(2005),AmegashieandRunkel(2007),surveyed byChowdhuryandGürtler (2015).Multipleefforts,i.e.productionandappropriation,havebeen analyzedbyJ. Hirshleifer(1995),SkaperdasandSyropoulos(1997),andHausken(2005,where contestsuccessdependsonlyonappropriation.…”

Section: Multiple Types Of Effortsmentioning

confidence: 99%

A Review of Axioms for Group Contest Success Functions

Hausken

2022

International Journal of Strategic Decision Sciences

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Axioms are reviewed for group contest success functions for general production functions, focusing particularly on the additive production function and the multiplicative Cobb-Douglas production function. With one minor exception, these axioms already exist in the literature. This article clarifies which axioms apply and how they apply for group contest success functions. Essential for axioms satisfied by the additive production function, driven by substitutability across efforts, is the sufficiency of only one group member exerting effort. Essential for axioms satisfied by the multiplicative production function, driven by complementarity across efforts, is that all group members exert efforts. The additive production function satisfies an axiom where adding an amount to one effort and subtracting the same amount from a second equivalent substitutable effort does not change the winning probabilities. The Cobb-Douglas production function satisfies a strong homogeneity axiom where an equiproportionate change in matched group member’s efforts does not affect the winning probabilities.

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Reimbursement as a tool to reduce sabotaging in rent‐seeking contests

Cited by 6 publications

References 15 publications

Winner‐pay contests with a no‐winner possibility

Winner‐pay contests with a no‐winner possibility

The yardstick approach in a Tullock contest

A Review of Axioms for Group Contest Success Functions

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