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A complete-information partnership contest with negative productivity spillovers

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  • Petkov, Vladimir

Abstract

This note examines a complete-information contest with non-linear rank-order effects. The players’ payoffs incorporate a multiplicative term that allows for negative productivity spillovers. Under certain conditions, our game has a symmetric mixed-strategy equilibrium. To characterize this equilibrium, we adapt a method originally developed for linear settings. We obtain closed-form solutions for the mixing distribution, as well as for the expected efforts and payoffs. The note also explores the implications of negative productivity spillovers for optimal contest design. We show that a planner who seeks to maximize the participants’ expected payoffs may choose interior values for her instruments. We derive simple expressions for these values.

Suggested Citation

  • Petkov, Vladimir, 2019. "A complete-information partnership contest with negative productivity spillovers," Economics Letters, Elsevier, vol. 181(C), pages 195-198.
    • Handle: RePEc:eee:ecolet:v:181:y:2019:i:c:p:195-198
    DOI: 10.1016/j.econlet.2019.05.039
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    References listed on IDEAS

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    1. Benny Moldovanu & Aner Sela, 2008. "The Optimal Allocation of Prizes in Contests," Springer Books, in: Roger D. Congleton & Arye L. Hillman & Kai A. Konrad (ed.), 40 Years of Research on Rent Seeking 1, pages 615-631, Springer.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Complete-information contests; Non-linear order effects; Mixed-strategy equilibrium;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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