Revenue Maximizing Head Starts in Contests

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The working papers published in the Series constitute work in progress circulated to stimulate discussion and critical comments. Views expressed represent exclusively the authors' own opinions and do not necessarily refl ect those of the editors. Terms of use: Documents in Ruhr Economic Papers #524

Sorting in iterated incumbency contests

“…Examples of contests complying with Assumptions 1 -3 that are homogeneous but not role-symmetric include both all-pay auctions and Tullock contests with asymmetric bid-effectiveness for the challenger and the incumbent (Franke et al, 2014a;Leininger, 1993). Examples of contests that satisfy neither homogeneity nor role symmetry include contests with asymmetric head-starts as analyzed by Konrad (2002) and Siegel (2014) in an all-pay auction framework and by Franke et al (2014b) in a Tullock contest framework. Alas, these contests violate our Assumption 3: if one of the players enjoys a head start that is sufficiently high, then both players remain inactive, implying that, for both players, the winning probabilities stay constant in their respective incumbency rents over a range.…”

Extractive contest design

“…Several papers have considered maximization of the aggregate effort in a class of CSFs. CSFs using the following devices have been examined: concave technologies and power technologies 2 in the lottery contest (Nti (2004)); power technologies in the lottery contest (Michaels (1988)); biases multiplying efforts in the lottery contest, (Franke et al (2013)); biases multiplying efforts with power technologies in the lottery contest and biases multiplying efforts the all-pay auction auction (Epstein et al (2013)); 3 biases multiplying efforts in the lottery contest and the all-pay auction (Franke et al (2014a)); head starts added to efforts in the lottery contest and all-pay auction (Franke et al (2014b)); biases multiplying efforts given a power technology in the lottery contest (Ewerhart (2017)); biases multiplying efforts and head starts added to efforts in the lottery contest and the all-pay auction (Franke et al (2018)).…”