Payoff Shares in Two-Player Contests

Samuel Häfner () and Georg Nöldeke
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Samuel Häfner: University of Basel

Working papers from Faculty of Business and Economics - University of Basel

Abstract: In contest models with symmetric valuations, equilibrium payoffs are positive shares of the value of the prize. In contrast to a bargaining situation, these shares sum to less than one because a share of the value is lost due to rentdissipation. We ask: can every such division into payoff shares arise as the outcome of the unique pure-strategy Nash equilibrium of a simple asymmetric contest in which contestants differ in the effectiveness of their efforts? For two-player contests the answer is shown to be positive.

Keywords: Contests; Pure-Strategy Equilibrium; Rent-Dissipation (search for similar items in EconPapers)
JEL-codes: C72 D72 D74 (search for similar items in EconPapers)
Date: 2014-12-01
New Economics Papers: this item is included in nep-gth, nep-hpe and nep-mic
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Related works:
Journal Article: Payoff Shares in Two-Player Contests (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:bsl:wpaper:2014/11

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