Dynamic common-value contests

Toomas Hinnosaar

No 479, Carlo Alberto Notebooks from Collegio Carlo Alberto

Abstract: In this paper, I study dynamic common-value contests. Agents arrive over time and expend efforts to compete for prizes that are allocated proportionally according to efforts exerted. This model can be applied to a number of examples, including rent-seeking, lobbying, advertising, and R&D competitions. I provide a full characterization of equilibria in dynamic common-value contests and use it to study their properties, including comparative statics, earlier-mover advantage, and large contests. I show that information about other players’ efforts plays an important role in determining the total effort and that the total effort is strictly increasing with the information that becomes available.

Keywords: contests; sequential games; contest design; rent-seeking; R&D; advertising (search for similar items in EconPapers)
JEL-codes: C72 C73 D72 D82 (search for similar items in EconPapers)
Pages: pages 34
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:cca:wpaper:479

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