Asymmetric Contests with Head Starts and Nonmonotonic Costs

Ron Siegel

American Economic Journal: Microeconomics, 2014, vol. 6, issue 3, 59-105

Abstract: This paper studies equilibrium behavior in a class of games that models asymmetric multiprize competitions in which players' costs need not be strictly increasing in their performance. Such costs accommodate various types of asymmetries, including head starts. Head starts capture incumbency advantages, prior investments, and technological differences. I provide an algorithm that constructs the unique equilibrium in which players do not choose weakly-dominated strategies, and apply it to study multiprize all-pay auctions with head starts. A comparison to the standard all-pay auction shows that the strategic effects of head starts differ substantially from those of differing valuations.

JEL-codes: D11 D44 (search for similar items in EconPapers)
Date: 2014
Note: DOI: 10.1257/mic.6.3.59
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Citations: View citations in EconPapers (48)

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