Multi-Battle Contests

Dan Kovenock and Kai Konrad

No 5645, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We study equilibrium in a multistage race in which players compete in a sequence of simultaneous move component contests. Players may win a prize for winning each component contest, as well as a prize for winning the overall race. Each component contest is an all-pay auction with complete information. We characterize the unique equilibrium analytically and demonstrate that it exhibits endogenous uncertainty. Even a large lead by one player does not fully discourage the other player, and each feasible state is reached with positive probability in equilibrium (pervasiveness). Total effort may exceed the value of the prize by a factor that is proportional to the maximum number of stages. Important applications are to war, sports, and R&D contests and the results have empirical counterparts there.

Keywords: All-pay auction; Contest; Race; Conflict; Multi-stage; R&d; Endogenous uncertainty; Preemption; Discouragement (search for similar items in EconPapers)
JEL-codes: D72 D74 (search for similar items in EconPapers)
Date: 2006-04
New Economics Papers: this item is included in nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Related works:
Journal Article: Multi-battle contests (2009)
Working Paper: Multi-battle contests (2009)
Working Paper: Multi-battle contests (2006)
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