A note on Poisson contests

Nava Kahana and Doron Klunover ()

Public Choice, 2015, vol. 165, issue 1, 97-102

Abstract: We apply the environmental equivalence property of Poisson games (Myerson, In Int J Game Theory 27:375–392, 1998b ) to show that, in contests in which the number of contestants is a Poisson random variable with at least two expected contestants and a non-increasing return to effort, ex-ante aggregate effort is less than in a corresponding contest wherein the number of participants is equal to the expected number of contestants under uncertainty. Uncertainty about the number of participants in a rent-seeking contest seems natural. With rent-seeking contests attracting socially wasteful investments of effort or scarce resources, uncertainty generates a social benefit. Copyright Springer Science+Business Media New York 2015

Keywords: Contests; Population uncertainty; Poisson distribution; Rent dissipation; C72; D72; D82 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (15)

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DOI: 10.1007/s11127-015-0295-2

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