Effort Provision and Incentivisation in Tullock Group-Contests with Many Groups: An Explicit Characterisation

Davide Bosco and Mario Gilli

No 540, Working Papers from University of Milano-Bicocca, Department of Economics

Abstract: We study effort provision and incentivisation in a Tullock group-contest with m ≥ 2 groups that differ in size. A novel algorithmic procedure is presented that, under a symmetry assumption, explicitly characterises the equilibrium. Endogenous, optimal incentivisation schemes are then determined. Four results ensue. First, strategic interactions endogenously come in mean-field form: individual effort provision responds to the aggregate effort and average egalitarianism across groups. Therefore, the game is aggregative. Second, individuals endlessly cycle between zero and positive effort provision at some incentivisation schemes: no pure-strategy equilibria exist in these cases. Third, group size determines whether the egalitarianism of endogenous schemes increases or decreases in the average egalitarianism across groups. Fourth, all groups provide effort at the endogenous schemes if incentivisation is properly restricted.

Keywords: Collective-action problem; Conflict; Selective incentives; Strategic complements and substitutes. (search for similar items in EconPapers)
JEL-codes: C72 D71 D74 (search for similar items in EconPapers)
Pages: 53
Date: 2024-06
New Economics Papers: this item is included in nep-exp, nep-mac and nep-mic
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Related works:
Working Paper: Effort Provision and Incentivisation in Tullock Group-Contests with Many Groups: An Explicit Characterisation (2024)
Working Paper: Effort Provision and Incentivisation in Tullock Group-Contests with Many Groups: An Explicit Characterisation (2024)
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