Properties of Contests

Luis C. Corchón and Marco Serena
Authors registered in the RePEc Author Service: Luis C. Corchon

Working Papers from Max Planck Institute for Tax Law and Public Finance

Abstract: We aim at characterizing which kind of functions could be explained (rationalized) as the best reply of payoff-maximizing agents in contests for a fixed prize. We show that the rationalizability strongly differs between Decisive Contests, where the prize is allocated with certainty, and Possibly Indecisive Contests, where the prize may not be awarded. In the latter, any arbitrary set of best reply functions is rationalizable, thus "anything goes." In the former, best reply functions have to satisfy strong conditions in two-person contests. But with more than two contestants, we have a partial result showing that anything goes as well. We end the paper with an outline of possible applications of our results to R&D and labor markets.

JEL-codes: C62 C72 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2016-12
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