Contests with a constrained choice set of effort

Doron Klunover and John Morgan

Economics Letters, 2020, vol. 196, issue C

Abstract: We consider a symmetric two-player contest, in which the choice set of effort is constrained. We apply a fundamental property of the payoff function to show that, under standard assumptions, there exists a unique Nash equilibrium in pure strategies. It is shown that all equilibria are near the unconstrained equilibrium. Perhaps surprisingly, this is not the case when players have different prize evaluations.

Keywords: Contests; Constrained choice set of effort (search for similar items in EconPapers)
JEL-codes: C72 F51 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:196:y:2020:i:c:s0165176520303402

DOI: 10.1016/j.econlet.2020.109559

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