Contests with an unknown number of contestants

Johannes Münster ()

Public Choice, 2006, vol. 129, issue 3, 353-368

Abstract: This paper studies rent-seeking contests where the contestants do not know the number of actively competing contestants. Two models are compared. In the first, all players are risk neutral; in the second, all have constant absolute risk aversion. If the expected fraction of active contestants is low, an increase in the number of potential contestants increases individual rent-seeking efforts. This effect is in contrast to the complete information case where individual rent-seeking efforts decrease in the number of contestants. The effect is more likely under risk neutrality, but also possible under risk aversion. Equilibrium rent seeking efforts are lower under risk aversion if and only if the expected fraction of active contestants is low. Copyright Springer Science+Business Media, B.V. 2006

Keywords: Contest; Rent-seeking; Number uncertainty; Risk aversion (search for similar items in EconPapers)
JEL-codes: D72 D82 (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (8)

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DOI: 10.1007/s11127-006-9035-y

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