 On Existence and Properties of Pure-strategy Equilibria under ContestsSakshi Gupta () and Ram Singh () Working Papers from eSocialSciences Abstract: This paper strictly convex cost functions and demonstrate existence of pure strategy Nash equilibrium for the difference form. Moreover, it shows that several properties of equilibria and the comparative statics for the difference form closely resemble those for the ratio form. However, unlike the ratio form, under a difference form contest the existence of pure strategy Nash equilibrium is sensitive to the value of the prize. The use of ‘ratio form’ probability of success function dominates the existing literature on contests. Very few works have focused on the ’difference form’ functions, notwithstanding their robust theoretical foundations and intuitive appeal in several contexts. Assuming the cost of efforts to be linear, Hirshleifer (1989) and Baik (1998) have argued that under the difference form contests, there is no interior pure strategy Nash equilibrium. In contrast, existence of interior pure strategy Nash equilibrium is well known for the ratio form contest functions. Keywords: eSS; Pure-strategy Equilibria; Nash equilibrium; prize; probability of success; robust theoretical foundations; intuitive appeal; strategy; contest. (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ess:wpaper:id:12840 Access Statistics for this paper More papers in Working Papers from eSocialSciences |
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