Population uncertainty in contests

Roger Myerson and Karl Wärneryd

Economic Theory, 2006, vol. 27, issue 2, 469-474

Abstract: We study contests where the set of players is a random variable. If it is known for certain that there will be at least one participant, then aggregate contest expenditure in equilibrium is strictly lower in a contest with population uncertainty than in a non-uncertain contest with the same expected number of players. This suggests an explanation of, for example, why empirical studies show rent-seeking expenditures to be much lower than predicted by other theories. Copyright Springer-Verlag Berlin/Heidelberg 2006

Keywords: Contests; population uncertainty. (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (57)

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DOI: 10.1007/s00199-004-0605-2

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