Tullock’s contest with reimbursements

Matros, Alexander; Armanios, Daniel Erian

doi:10.1007/s11127-009-9436-9

Cited by 48 publications

(56 citation statements)

References 16 publications

(9 reference statements)

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“…Theory predicts that lottery contests with refunds should generate higher average bids than allpay lottery contests (Matros and Armanios, 2009). The results of the experiment provide support for this prediction.…”

Section: Endogenous Prizes Spillovers and Externalitiesmentioning

confidence: 99%

A Survey of Experimental Research on Contests, All-Pay Auctions and Tournaments

2012

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Many economic, political and social environments can be described as contests in which agents exert costly efforts while competing over the distribution of a scarce resource. These environments have been studied using Tullock contests, all-pay auctions and rank-order tournaments. This survey provides a comprehensive review of experimental research on these three canonical contests. First, we review studies investigating the basic structure of contests, including the number of players and prizes, spillovers and externalities, heterogeneity, risk and incomplete information. Second, we discuss dynamic contests and multi-battle contests. Then we review studies examining sabotage, feedback, bias, collusion, alliances, group contests and gender, as well as field experiments. Finally, we discuss applications of contests and suggest directions for future research. IntroductionMany economic, political and social environments can be described as contests in which competing agents have the opportunity to expend scarce resources -such as effort, money, time, or troops -in order to affect the probabilities of winning prizes. Examples range from the competition for mates, college admission, patents, or promotions within firms, to the process of litigation or lobbying politicians, to elections, sports competitions, and violent global conflicts (Tullock, 1967;Krueger, 1974). As is obvious from this list, these environments have attracted considerable attention in applications in a wide range of fields, both in-and out-side of economics. They have also been studied extensively by economic theorists in what has become known as the field of contest theory (Konrad, 2009). Although this field continues to attract many young theorists, it has its roots in three models developed in the mid-seventies to early eighties: the Tullock (1980) model of rent-seeking, the Lazear and Rosen (1981) rank-order tournament model, and the all-pay auction (Hirshleifer and Riley, 1978;Nalebuff and Stiglitz, 1983;Dasgupta, 1986;Hillman and Riley, 1989). Despite the fact that the three models historically developed somewhat independently, they represent special cases of a general contest model that can be formulated in a unified framework.Despite an extensive and established theoretical literature, much less effort has been devoted to empirically investigate individual behavior in different contests and compare such behavior with theoretical predictions. The main reason is that it is not trivial to measure individual effort in the field since the researcher can only observe the performance of contestants, which is a function of effort, ability and luck (Ericsson and Charness, 1994). The majority of empirical studies use either firm level data (Prendergast, 1999) or sports data (Szymanski, 2003). Because it is typically difficult to measure the actual effort expended by players in the field, almost all of these studies focus solely on investigating whether the pattern of outcomes is consistent with the theoretical predictions.Controlled experimen...

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Section: Endogenous Prizes Spillovers and Externalitiesmentioning

confidence: 99%

A Survey of Experimental Research on Contests, All-Pay Auctions and Tournaments

2012

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“…Cohen and Sela (2005) restrict the winning payoff to show that in certain contests a weaker contestant can win with higher probability than a stronger contestant. Many other studies use modified payoffs in the Tullock contest, a short list of example includes Chung (1996), Alexeev and Leitzel (1996), Lee and Kang (1998), Amegashie (1999), Glazer and Konrad (1999), Garfinkel and Skaperdas (2000), Grossman and Mendoza (2001), Öncüler and Croson (2005), and Matros and Armanios (2009).…”

Section: Introductionmentioning

confidence: 99%

A generalized Tullock contest

Chowdhury

Sheremeta

2010

Public Choice

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We construct a generalized Tullock contest under complete information where contingent upon winning or losing, the payoff of a player is a linear function of prizes, own effort, and the effort of the rival. This structure nests a number of existing contests in the literature and can be used to analyze new types of contests. We characterize the unique symmetric equilibrium and show that small parameter modifications may lead to substantially different types of contests and hence different equilibrium effort levels.JEL Classifications: C72, D72, D74

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“…Therefore, there is a strong incentive to free ride on the effort of the others. One can apply our analysis to show that multiple equilibria can also arise in contests of Amegashie (1999), Glazer and Konrad (1999), and Matros and Armanios (2009). For example, Glazer and Konrad (1999) study a contest Γ( , , {(1 − ) , 0, −(1 − ), −1,0,0}) in which the non-negative profit of a rent-seeker is taxed by a tax rate ∈ (0,1).…”

Section: Examples Of Multiple Equilibriamentioning

confidence: 99%