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A model of parallel contests

Author

Listed:
  • Wei-Torng Juang

    (Institute of Economics, Academia Sinica
    National Chiao Tung University)

  • Guang-Zhen Sun

    (The University of Macau)

  • Kuo-Chih Yuan

    (Soochow University)

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.

Suggested Citation

  • Wei-Torng Juang & Guang-Zhen Sun & Kuo-Chih Yuan, 2020. "A model of parallel contests," International Journal of Game Theory, Springer;Game Theory Society, vol. 49(2), pages 651-672, June.
    • Handle: RePEc:spr:jogath:v:49:y:2020:i:2:d:10.1007_s00182-019-00705-0
    DOI: 10.1007/s00182-019-00705-0
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    References listed on IDEAS

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    Cited by:

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    2. Zhenjun Yan & Xinyan Wu & Jing Li & Bingqing Liang, 2022. "Competition and Heterogeneous Innovation Qualities: Evidence from a Natural Experiment," Sustainability, MDPI, vol. 14(13), pages 1-21, June.

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    More about this item

    Keywords

    Parallel contests; Rent extraction; Participation effect; Effort effect;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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