"Reverse" Nested Lottery Contests
Qiang Fu (),
Jingfeng Lu () and
Zhewei Wang ()
Additional contact information
Qiang Fu: Department of Strategy and Policy, National University of Singapore
No 2013-02, SDU Working Papers from School of Economics, Shandong University
This paper proposes a multi-prize "reverse" nested lottery contest model, which can be viewed as the "mirror image" of the conventional nested lottery contest of Clark and Riis (1996a). The reverse-lottery contest model determines winners by selecting losers based on contestants' one-shot effort through a hypothetical sequence of lotteries. We provide a microfoundation for the reverse-lottery contest from a perspective of (simultaneous) noisy performance ranking and establish that the model is underpinned by a unique performance evaluation rule. We further demonstrate that the noisy-ranking model can be interpreted intuitively as a "worst-shot" contest, in which contestants' performances are evaluated based on their most severe mistakes. The reverse-lottery contest model thus depicts a great variety of widely observed competitive activities of this nature. A handy closed-form solution for a symmetric equilibrium of the reverse-lottery contest is obtained. We show that the winner-take-all principle continues to hold in reverse-lottery contests. Moreover, we find that a reverse-lottery contest elicits more effort than a conventional lottery contest whenever the prizes available to contestants are relatively scarce.
Keywords: Contest Elimination Function; Imperfectly Discriminatory Contests; Least-Favorable Performance Ranking; Multi-Prize Contest. (search for similar items in EconPapers)
JEL-codes: C72 D72 D74 (search for similar items in EconPapers)
Pages: 30 pages
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 (3) Track citations by RSS feed
Downloads: (external link)
http://econ.sdu.edu.cn/RePEc/shn/wpaper/Reverse_Contests20130709.pdf July, 2013 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden
Journal Article: “Reverse” nested lottery contests (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:shn:wpaper:2013-02
Access Statistics for this paper
More papers in SDU Working Papers from School of Economics, Shandong University Contact information at EDIRC.
Bibliographic data for series maintained by Qiang Chen ().