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Optimal large population Tullock contests

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  • Ratul Lahkar
  • Saptarshi Mukherjee

Abstract

We consider Tullock contests where contestants can be divided into a finite set of types according to their strategy cost function. Solving such contests is intractable if the number of players is finite but large and there are nonlinearities and asymmetries present. But by approximating the finite player contest with a large population model that can be solved in closed form, we can approximate equilibrium behavior in the finite player model. We then characterize the optimal bias parameters of the large population contest and interpret them as approximations of optimal bias parameters in finite player contests. We also identify conditions under which those parameters are increasing or decreasing according to the cost parameters. The parameters are biased in favor of high-cost agents if the cost functions are strictly convex and the likelihood of success is sufficiently responsive to strategy.

Suggested Citation

  • Ratul Lahkar & Saptarshi Mukherjee, 2023. "Optimal large population Tullock contests," Oxford Open Economics, Oxford University Press, vol. 2, pages 289-294.
    • Handle: RePEc:oup:ooecxx:v:2:y:2023:i::p:289-94.
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    File URL: http://hdl.handle.net/10.1093/ooec/odad003
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    References listed on IDEAS

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    1. Richard Cornes & Roger Hartley, 2005. "Asymmetric contests with general technologies," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 26(4), pages 923-946, November.
    2. Qiang Fu, 2006. "A Theory of Affirmative Action in College Admissions," Economic Inquiry, Western Economic Association International, vol. 44(3), pages 420-428, July.
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    Keywords

    Contest Design; Tullock Contests;

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