Corchon, Luis (2009): Welfare Maximizing Contest Success Functions when the Planner Cannot Commit.
Download (195kB) | Preview
We analyze how a contest organizer chooses the winner when the contestants.efforts are already exerted and commitment to the use of a given contest success function is not possible. We define the notion of rationalizability in mixed-strategies to capture such a situation. Our approach allows to derive different contest success functions depending on the aims and attitudes of the decider. We derive contest success functions which are closely related to commonly used functions providing new support for them. By taking into account social welfare considerations our approach bridges the contest literature and the recent literature on political economy.
|Item Type:||MPRA Paper|
|Original Title:||Welfare Maximizing Contest Success Functions when the Planner Cannot Commit|
|English Title:||Welfare Maximizing Contest Success Functions when the Planner Cannot Commit|
|Keywords:||Endogenous Contests; Contest Success Function; Mixed-Strategies.|
|Subjects:||D - Microeconomics > D7 - Analysis of Collective Decision-Making > D74 - Conflict; Conflict Resolution; Alliances
D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behavior
C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C72 - Noncooperative Games
|Depositing User:||Luis C. Corchon|
|Date Deposited:||20. Nov 2009 16:31|
|Last Modified:||22. Feb 2013 22:05|
 Baik, Kyung Hwan (1998), "Difference-Form Contest Success Functions and Effort Levels in Contests,"European Journal of Political Economy 14, 685�701.
 Blavatskyy, Pavlo R. (2008), "Contest success function with the possibility of a draw: axiomatization,"CESifo Venice Summer Institute 2008.
 Che, Y.-K. and I. Gale (2000), "Difference-Form Contests and the Robustness of All-Pay Auctions,"Games and Economic Behavior 30, 22�43.
 Corchón, Luis and Matthias Dahm (2009), "Foundations for Contest Success Functions," Economic Theory, forthcoming.
 Dasgupta, A. and K. O. Nti (1998), "Designing Optimal Contests,"European Journal of Political Economy 14, 587�603.
 Epstein, Gil S. and Shmuel Nitzan (2006), "The Politics of Randomness," Social Choice and Welfare 27, 423�433.
 Grossman Gene M. and Elhanan Helpman (2001) Special interest politics. MIT Press, Cambridge.
 Grossman, Gene M. and Elhanan Helpman (1994) "Protection for sale," American Economic Review, 84 (4): 833�850.
 Jia, Hao (2007), "A Stochastic Derivation of Contest Success Functions," Public Choice, forthcoming.
 Kahneman, Daniel and Amos Tversky (1979), "Prospect theory: An analysis of decisions under risk,"Econometrica, 47, 313�327.
 Kihlstrom, R.; Mas-Colell, A. and H. Sonnenschein (1976), "The Demand Theory of the Weak Axiom of Revealed Preference,"Econometrica, 44 (5), 971-978.
 Konrad, Kai A. (2007), "Strategy in Contests - An Introduction," WZB Discussion Paper SP II 2007�01.
 Konrad, Kai A. (2002), "Investment in the absence of property rights: the role of incumbency advantages," European Economic Review 46, 1521�1537.
 Hirshleifer, Jack (1989), "Conflict and Rent-Seeking Success Functions: Ratio vs. Difference Models of Relative Success,"Public Choice 63, 101�12.
 Mas-Colell, A. (1985). Pareto Optima and Equilibria: The Finite Dimensional Case. In C. Aliprantis, O. Burkinshaw and N. Rothman, (Eds.), Advances in Equilibrium Theory, Lecture Notes in Economics, No. 244, Springer-Verlag.
 Mas-Colell, A. (1986). Valuation Equilibrium and Pareto Optimum Revisited. In A. Mas-Colell and W. Hildenbrand, eds, Chapter 17 in Advances in Mathematical Economics, North-Holland, 1986.
 Persson Torsten and Guido Tabellini (2000) Political economics: explaining economic policy. MIT Press, Cambridge.
 Prelec, Drazen (1998), "The probability weighting function," Econometrica 66 (3), 497�527.
 Rai, Birendra K. and Rajiv Sarin (2009), "Generalized contest success functions," Economic Theory 40 (1), 139�149.
 Skaperdas, Stergios (1996), "Contest Success Functions," Economic Theory 7, 283�290.
 Skaperdas, Stergios and Li Gan (1995), "Risk aversion in contests", The Economic Journal 105, 951�962.
 Skaperdas, Stergios and Samarth Vaidya (2009), "Persuasion as a Contest," mimeo, February 2009.
 Tullock, Gordon (1980). E¢ cient rent seeking. In J. Buchanan, R. Tollison, and G. Tullock (Eds.), Toward a theory of the rentseeking society. College Station: Texas A&M University Press, 97�112.
 Wärneryd, Karl (1998), "Distributional conflict and jurisdictional organization," Journal of Public Economics 69, 435�450.
 Wärneryd, Karl (2000), "In defense of lawyers: moral hazard as an aid to cooperation", Games and Economic Behavior 33, 145�158.
 Yates, Andrew James (2007), "Winner-Pay Contests" unpublished manuscript. Available at SSRN: http://ssrn.com/abstract=1026934
Available Versions of this Item
- Welfare Maximizing Contest Success Functions when the Planner Cannot Commit. (deposited 20. Nov 2009 16:31) [Currently Displayed]