Prize sharing rules in collective contests: when do social norms matter?

Dhritiman Gupta
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Dhritiman Gupta: O.P. Jindal Global University

Review of Economic Design, 2023, vol. 27, issue 1, No 9, 244 pages

Abstract: Abstract We consider collective contests with group-specific minimum shares, which we call group-specific “norms” of competitiveness. The minimum shares bound the incentive schemes available to a group. We fully characterize how group sizes interact with such norms. We show that the smaller group is generally “aggressive,” adopting the norm sharing rule, which helps generate maximal intra-group competition. On the other hand, the larger group is often “docile,” exceeding the norm sharing rule, which softens intra-group competition. We also examine how group welfare relates to group sizes and the norm sharing rules. We identify when the larger group fares worse in the contest, a phenomenon known as Group Size Paradox in the literature.

Keywords: Rent seeking; Collective action; Prize sharing rules (search for similar items in EconPapers)
JEL-codes: C72 D23 D71 D72 H41 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s10058-021-00273-4

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