A complete-information partnership contest with negative productivity spillovers
Economics Letters, 2019, vol. 181, issue C, 195-198
This note examines a complete-information contest with non-linear rank-order effects. The players’ payoffs incorporate a multiplicative term that allows for negative productivity spillovers. Under certain conditions, our game has a symmetric mixed-strategy equilibrium. To characterize this equilibrium, we adapt a method originally developed for linear settings. We obtain closed-form solutions for the mixing distribution, as well as for the expected efforts and payoffs. The note also explores the implications of negative productivity spillovers for optimal contest design. We show that a planner who seeks to maximize the participants’ expected payoffs may choose interior values for her instruments. We derive simple expressions for these values.
Keywords: Complete-information contests; Non-linear order effects; Mixed-strategy equilibrium (search for similar items in EconPapers)
JEL-codes: C72 M52 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:181:y:2019:i:c:p:195-198
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