Biased contests for symmetric players
Mikhail Drugov () and
Dmitry Ryvkin ()
MPRA Paper from University Library of Munich, Germany
In a biased contest, one of the players has an advantage in the winner determination process. We characterize a novel class of biased contest success functions pertaining to such contests and provide necessary and sufficient conditions for zero bias to be a critical point of arbitrary objectives satisfying certain symmetry restrictions. We, however, challenge the common wisdom that unbiased contests are always optimal when contestants are symmetric ex ante or even ex post. We show that contests with arbitrary favorites, i.e., biased contests of symmetric players, can be optimal in terms of various objectives such as expected aggregate effort, the probability to reveal the stronger player as the winner or expected effort of the winner.
Keywords: Biased contest; Biased contest success function; Aggregate effort; Predictive power; Winner's effort (search for similar items in EconPapers)
JEL-codes: C72 D63 D72 J71 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-gth and nep-mic
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Journal Article: Biased contests for symmetric players (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:75378
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