Strategic choice of sharing rules in collective contests

Balart, Pau; Flamand, Sabine; Troumpounis, Orestis

doi:10.1007/s00355-015-0911-6

Cited by 15 publications

(30 citation statements)

References 29 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…In contrast to the simultaneous timing (Balart, Flamand, & Troumpounis, ), the small group never outperforms the large one in terms of winning probabilities. In other words, Olson's () celebrated group size paradox (GSP) vanishes regardless of the leader's size.…”

Section: Introductionmentioning

confidence: 72%

“…The sharing rule

α_{i} \geq 0

represents how tied the allocation of the private part of the prize is on individual contributions (i.e., meritocracy) as opposed to egalitarianism in group i . Previous literature on sharing rules in collective rent seeking has considered both the cases of

α_{i} \in false[0, 1 false]

(Baik, ; Lee, ; Noh, ; Ueda, ) and

α_{i} \in false[0, \infty false)

(Baik & Lee, , ; Baik & Shogren, ; Balart et al., ; Lee & Kang, ). If

α_{i} > 1

, the sharing rule of group i allows for transfers among its members, as in Hillman and Riley () .…”

Section: The Modelmentioning

confidence: 99%

“…The equilibrium of this stage is solved in Balart et al. () who generalize the results of Ueda () and Davis and Reilly () by allowing for a mixed public–private prize, thereby leading to the possibility of monopolization. More precisely, group i retires from the contest (i.e.,

e_{italicki} = {\overset{e}{true}}_{i} = 0

for all

k \in i

) whenever

α_{i} \leq \frac{n_{i} false[α_{j} p (n_{j} - 1) - n_{j} (1 - p) false] - n_{j} p}{false(n_{i} - 1 false) n_{j} p},

with

i, j = A, B

and

j \neq i

.…”

Section: The Modelmentioning

confidence: 99%

“…Indeed, we show that when the prize is not private enough and the sharing rules allow for transfers, the sequential choice of sharing rules leads to monopolization, a situation in which one group retires from the competition (Ueda, ). Interestingly, the large group takes advantage of its leadership by preventing the small group from being active for a greater range of privateness of the prize compared to the simultaneous case (Balart et al., ), thereby making monopolization more likely. However, this is not true when it is the small group that moves first, as in this case monopolization occurs in the same instances as in the simultaneous game.…”

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Sequential choice of sharing rules in collective contests

Balart¹,

Flamand²,

Gürtler

et al. 2018

J Public Economic Theory

Self Cite

View full text Add to dashboard Cite

Groups competing for a prize need to determine how to distribute it among their members in case of victory. Considering competition between two groups of different size, we show that the small group's sharing rule is a strategic complement to the large group's sharing rule in the sense that if the small group chooses a more meritocratic sharing rule, the large group wishes to choose a more meritocratic rule as well. On the contrary, the large group's sharing rule is a strategic substitute to the small group's sharing rule, hence the timing of choice is crucial. For sufficiently private prizes, a switch from a simultaneous choice to the small group being the leader consists in a Pareto improvement and reduces aggregate effort. On the contrary, when the large group is the leader, aggregate effort increases. As a result, the equilibrium timing is such that the small group chooses its sharing rule first. If the prize is not private enough, the small group retires from the competition and switching from a simultaneous to a sequential timing may reverse the results in terms of aggregate effort. The sequential timing also guarantees that the small group never outperforms the large one.

show abstract

Section: Introductionmentioning

confidence: 72%

“…The sharing rule

α_{i} \geq 0

α_{i} \in false[0, 1 false]

(Baik, ; Lee, ; Noh, ; Ueda, ) and

α_{i} \in false[0, \infty false)

(Baik & Lee, , ; Baik & Shogren, ; Balart et al., ; Lee & Kang, ). If

α_{i} > 1

, the sharing rule of group i allows for transfers among its members, as in Hillman and Riley () .…”

Section: The Modelmentioning

confidence: 99%

e_{italicki} = {\overset{e}{true}}_{i} = 0

for all

k \in i

) whenever

α_{i} \leq \frac{n_{i} false[α_{j} p (n_{j} - 1) - n_{j} (1 - p) false] - n_{j} p}{false(n_{i} - 1 false) n_{j} p},

with

i, j = A, B

and

j \neq i

.…”

Section: The Modelmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Sequential choice of sharing rules in collective contests

Balart¹,

Flamand²,

Gürtler

et al. 2018

J Public Economic Theory

Self Cite

View full text Add to dashboard Cite

show abstract

“…4 For group contests allowing this possibility see, for example, Baik and Shogren (1995); Baik andLee (1997, 2001); Lee and Kang (1998); Gürtler (2005); Balart et al (2015).…”

Section: Link Between the Two Contestsmentioning

confidence: 99%