Hybrid All-Pay and Winner-Pay Contests
Publikation: Working paper › Forskning
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Hybrid All-Pay and Winner-Pay Contests. / Lagerlöf, Johan.
2017.Publikation: Working paper › Forskning
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TY - UNPB
T1 - Hybrid All-Pay and Winner-Pay Contests
AU - Lagerlöf, Johan
PY - 2017
Y1 - 2017
N2 - In many contests in economic and political life, both all-pay and winner-pay expenditures matter for winning. This paper studies such hybrid contests under symmetry and asymmetry. The symmetric model is very general but still yields a simple closed-form solution. More contestants tend to lead to substitution toward winner-pay investments, and total expenditures are always lower than in the corresponding all-pay contest. With a biased decision process and two contestants, the favored contestant wins with a higher likelihood, chooses less winner-pay investments, and contributes more to total expenditures. An endogenous bias that maximizes total expenditures disfavors the high-valuation contestant but still makes her the more likely one to win.
AB - In many contests in economic and political life, both all-pay and winner-pay expenditures matter for winning. This paper studies such hybrid contests under symmetry and asymmetry. The symmetric model is very general but still yields a simple closed-form solution. More contestants tend to lead to substitution toward winner-pay investments, and total expenditures are always lower than in the corresponding all-pay contest. With a biased decision process and two contestants, the favored contestant wins with a higher likelihood, chooses less winner-pay investments, and contributes more to total expenditures. An endogenous bias that maximizes total expenditures disfavors the high-valuation contestant but still makes her the more likely one to win.
KW - Faculty of Social Sciences
KW - rent-seeking
KW - lobbying
KW - influence activities
KW - multiple influence channels
KW - producer theory
KW - C72
KW - D24
KW - D72
KW - D74
KW - rent-seeking
KW - lobbying
KW - influence activities
KW - multiple influence channels
KW - producer theory
KW - C72
KW - D24
KW - D72
KW - D74
M3 - Working paper
T3 - University of Copenhagen. Institute of Economics. Discussion Papers (Online)
BT - Hybrid All-Pay and Winner-Pay Contests
ER -
ID: 190435181