Offsetting Distortion Effects of Head Starts on Incentives in Tullock Contests

Dmitriy Knyazev and Moser Caspar ()
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Moser Caspar: TWS Partners, Berlin, Germany

The B.E. Journal of Theoretical Economics, 2024, vol. 24, issue 2, 467-485

Abstract: In this study, we examine a contest scenario where each player possesses a distinct head start that skews their chances of winning, thereby creating incentive distortions from the efficient level and adversely affecting the contest designer. While affirmative action policies offer a straightforward solution to counteract these distortions, their implementation may not always be viable in real-life applications. We characterize the unique class of non-discriminatory contest success functions (CSF) that enables to achieve an efficient level of effort when there are two players. Additionally, we demonstrate that achieving a symmetric equilibrium is unattainable without affirmative action when the contest involves more than two players.

Keywords: contest success function; discrimination; head start; Tullock contest (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1515/bejte-2024-0006

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