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Offsetting Distortion Effects of Head Starts on Incentives in Tullock Contests

Author

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  • Knyazev Dmitriy

    (Department of Business Decisions and Analytics, 27258 University of Vienna , Oskar-Morgenstern-Platz 1, 1090, Vienna, Austria)

  • Moser Caspar

    (TWS Partners, Berlin, Germany)

Abstract

In this study, we examine a contest scenario where each player possesses a distinct head start that skews their chances of winning, thereby creating incentive distortions from the efficient level and adversely affecting the contest designer. While affirmative action policies offer a straightforward solution to counteract these distortions, their implementation may not always be viable in real-life applications. We characterize the unique class of non-discriminatory contest success functions (CSF) that enables to achieve an efficient level of effort when there are two players. Additionally, we demonstrate that achieving a symmetric equilibrium is unattainable without affirmative action when the contest involves more than two players.

Suggested Citation

  • Knyazev Dmitriy & Moser Caspar, 2024. "Offsetting Distortion Effects of Head Starts on Incentives in Tullock Contests," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 24(2), pages 467-485.
    • Handle: RePEc:bpj:bejtec:v:24:y:2024:i:2:p:467-485:n:1008
    DOI: 10.1515/bejte-2024-0006
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    References listed on IDEAS

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