The Equivalence of Contests

Subhasish Chowdhury and Roman Sheremeta

Working Papers from Chapman University, Economic Science Institute

Abstract: We use a Tullock-type contest model to show that intuitively and structurally different contests can be strategically and revenue equivalent to each other. We consider a two-player contest, where outcome-contingent payoffs are linear functions of prizes, own effort, and the effort of the rival. We identify strategically equivalent contests that generate the same family of best response functions and, as a result, the same revenue. However, two strategically equivalent contests may yield different equilibrium payoffs. Finally, we discuss possible contest design applications and avenues for future theoretical and empirical research.

Keywords: rent-seeking; contest; spillover; equivalence; revenue equivalence; contest design (search for similar items in EconPapers)
JEL-codes: C72 D72 D74 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2010-02
New Economics Papers: this item is included in nep-cdm and nep-gth
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Citations: View citations in EconPapers (6)

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http://www.chapman.edu/ESI/wp/EquivalenceOfContests-Sheremeta.pdf (application/pdf)

Related works:
Working Paper: The Equivalence of Contests (2010)
Working Paper: The equivalence of contests (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:chu:wpaper:10-07

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