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Contests with Random Noise and a Shared Prize

Author

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  • Sheremeta, Roman
  • Masters, William
  • Cason, Timothy

Abstract

This note introduces a model of contests with random noise and a shared prize that combines features of Tullock (1980) and Lazear and Rosen (1981). Similar to results in Lazear and Rosen, as the level of noise decreases the equilibrium effort rises. As the noise variance approaches zero, the equilibrium effort of the shared-prize contest approaches that of a Tullock lottery contest.

Suggested Citation

  • Sheremeta, Roman & Masters, William & Cason, Timothy, 2009. "Contests with Random Noise and a Shared Prize," MPRA Paper 58271, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:58271
    as

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    File URL: https://mpra.ub.uni-muenchen.de/58271/1/MPRA_paper_58271.pdf
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    References listed on IDEAS

    as
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    7. O'Keeffe, Mary & Viscusi, W Kip & Zeckhauser, Richard J, 1984. "Economic Contests: Comparative Reward Schemes," Journal of Labor Economics, University of Chicago Press, vol. 2(1), pages 27-56, January.
    8. Arye L. Hillman & John G. Riley, 1989. "Politically Contestable Rents And Transfers," Economics and Politics, Wiley Blackwell, vol. 1(1), pages 17-39, March.
    9. Yigal Gerchak & Qi-Ming He, 2003. "When will the Range of Prizes in Tournaments Increase in the Noise or in the Number of Players?," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 5(02), pages 151-165.
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    Citations

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    Cited by:

    1. Subhashish Modak Chowdhury & Roman M. Sheremeta, 2009. "The equivalence of contests," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 09-06, School of Economics, University of East Anglia, Norwich, UK..
    2. Merve İntişah & Mürüvvet Büyükboyacı, 2024. "The role of noise variance on effort in group contests," Theory and Decision, Springer, vol. 97(2), pages 311-346, September.
    3. Grossmann, Martin, 2014. "Uncertain contest success function," European Journal of Political Economy, Elsevier, vol. 33(C), pages 134-148.

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    More about this item

    Keywords

    Contests; All-pay auctions; Tournaments; Random noise; Shared prize;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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