Winner‐pay contests with a no‐winner possibility

Yizhaq Minchuk

Managerial and Decision Economics, 2022, vol. 43, issue 6, 1874-1879

Abstract: We study winner‐pay Tullock contests with a no‐win parameter that reflects the likelihood that nobody will win the contest, in a symmetric model with complete information. We show that in contradiction to standard Tullock contests with a no‐win parameter, the increase in the no‐win parameter results in higher efforts. Additionally, a no‐win parameter will result in lower revenues for the contest designer and lower contestants profits than standard winner‐pay contests. We additionally extended our work to the asymmetric case and equivalent contests.

Date: 2022
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https://doi.org/10.1002/mde.3495

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Persistent link: https://EconPapers.repec.org/RePEc:wly:mgtdec:v:43:y:2022:i:6:p:1874-1879

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