Contests with Rank-Order Spillovers

Michael Baye, Dan Kovenock and Casper de Vries

No 09-066/2, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: This paper presents a unified framework for characterizing symmetric equilibrium in simultaneous move, two-player, rank-order contests with complete information, in which each player's strategy generates direct or indirect affine "spillover" effects that depend on the rank-order of her decision variable. These effects arise in natural interpretations of a number of important economic environments, as well as in classic contests adapted to recent experimental and behavioral models where individuals exhibit inequality aversion or regret. We provide the closed-form solution for the symmetric Nash equilibria of this class of games, and show how it can be used to directly solve for equilibrium behavior in auctions, pricing games, tournaments, R&D races, models of ligitation, and a host of other contests.

This paper has been accepted by 'Economic Theory' .

Keywords: Contests; Auctions; Spillovers (search for similar items in EconPapers)
JEL-codes: C72 C73 D43 D44 D74 (search for similar items in EconPapers)
Date: 2009-07-28
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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https://papers.tinbergen.nl/09066.pdf (application/pdf)

Related works:
Journal Article: Contests with rank-order spillovers (2012)
Working Paper: Contests with Rank-Order Spillovers (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20090066

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