Contests with Supporters

Bharat Goel and Arijit Sen

Working Papers from Max Planck Institute for Tax Law and Public Finance

Abstract: In many real-world contests ( political elections / lobbying for public projects), contestants try to engage supporters (unemployed youth / local residents) to fight for them. Such contests have the following features: a significant part of a contestant’s supporter compensation is contingent upon the contestant winning the contest, and supporters are (at least partially) mercenary in that higher compensation offers do induce them to switch allegiance away from a ‘like-minded’ contestant. We study a class of contests with the above features, where two contestants – a favourite and an underdog – recruit supporters by offering contingent (and non-contingent) compensations in cash or in excludable public goods like political access. Our analysis delineates contest equilibria with the following features: Contestants’ offers of contingent compensations force potential supporters to choose their allegiance on the basis of predicted winners – and that act, in and of itself, enables the favourite to extend her lead. In some cases, it is possible that the underdog is doubly disadvantaged – her total compensation bill is no less than the favourite’s though she manages to attract a smaller army of supporters and thus falls farther behind in the race. The contest is necessarily dissipative for the underdog: she would be strictly better off under a ban on the hiring of supporters (though she is the one who offers higher supporter compensation). In some cases, the availability of unemployed youth to act as supporters in contests causes everyone in the economy to lose (except, maybe, the supporters themselves).

Keywords: Contests; supporters; elections; lobbying (search for similar items in EconPapers)
JEL-codes: C72 D72 D74 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2019-05
New Economics Papers: this item is included in nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.tax.mpg.de/RePEc/mpi/wpaper/TAX-MPG-RPS-2019-08.pdf Full text (original version) (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mpi:wpaper:tax-mpg-rps-2019-08

Access Statistics for this paper

More papers in Working Papers from Max Planck Institute for Tax Law and Public Finance Contact information at EDIRC.
Bibliographic data for series maintained by Hans Mueller ().