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A model of parallel contests

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We develop a model of two parallel contests, asymmetric in quantity of homogeneous prizes open to contest, with a finite number of homogeneous risk-neutral bidders. Whether the bidder upon entry… Click to show full abstract

We develop a model of two parallel contests, asymmetric in quantity of homogeneous prizes open to contest, with a finite number of homogeneous risk-neutral bidders. Whether the bidder upon entry into a particular contest is aware of the realized number of competing contestants in the contest is irrelevant to the expected effort at equilibrium. At equilibrium the expected effort per capita in the larger contest (the contest with more prizes) is greater than that in the smaller one. The larger contest nonetheless does not attract enough contestants to achieve optimum in rent extraction from the bidders.

Keywords: contest; parallel contests; model parallel

Journal Title: International Journal of Game Theory
Year Published: 2020

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