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Contests with draws: axiomatization and equilibrium

Vesperoni, Alberto; Yildizparlak, Anil

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Authors

Alberto Vesperoni



Abstract

We introduce and axiomatize a class of single‐winner contest success functions that embody the possibility of a draw. We then analyze the game of contest that our success functions induce, having different prizes delivered in the occurrence of a win and a draw. We identify conditions for the existence and uniqueness of a symmetric interior Nash equilibrium and show that equilibrium efforts and equilibrium rent dissipation can be larger than in a Tullock contest (with no possibility of a draw) due to increased competition even if the draw‐prize is null. These results suggest that a contest designer may profit from introducing the possibility of a draw. Finally, we show that this approach naturally extends to multiprize contests with multiple draws across different subsets of the set of players. (JEL C72, D72, D74).

Citation

Vesperoni, A., & Yildizparlak, A. (2019). Contests with draws: axiomatization and equilibrium. Economic Inquiry, 57(3), 1597-1616. https://doi.org/10.1111/ecin.12780

Journal Article Type Article
Acceptance Date Feb 15, 2019
Online Publication Date Mar 14, 2019
Publication Date Jul 31, 2019
Deposit Date Feb 19, 2019
Publicly Available Date Mar 14, 2020
Journal Economic Inquiry
Print ISSN 0095-2583
Publisher Wiley
Peer Reviewed Peer Reviewed
Volume 57
Issue 3
Pages 1597-1616
DOI https://doi.org/10.1111/ecin.12780
Public URL https://durham-repository.worktribe.com/output/1307781

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Copyright Statement
This is the accepted version of the following article: Vesperoni, Alberto & Yildizparlak, Anil (2019). Contests with draws: axiomatization and equilibrium. Economic Inquiry 57(3): 1597-1616 which has been published in final form at https://doi.org/10.1111/ecin.12780. This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.




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