Biased contests

Dahm, Matthias; Porteiro, Nicolás

doi:10.1007/s11127-008-9278-x

Cited by 14 publications

(14 citation statements)

References 15 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…But this requires allocating resources to different contests, as in Gradstein and Nitzan (1989), or choosing effort twice, as in Sela (2012). There are also models in which the contest success function is biased towards some participant, see Franke et al (2013) for a general model, Franke (2012a) for an affirmative action context and Farmer and Pecorino (1999) or Dahm and Porteiro (2008) for other environments. This is analytically different from creating an extra prize.…”

Section: The Modelmentioning

confidence: 99%

Affirmative action through extra prizes

Dahm

Esteve‐González

2018

Journal of Economic Behavior & Organization

Self Cite

View full text Add to dashboard Cite

Some affirmative action policies establish that a set of disadvantaged competitors has access to an extra prize. Examples are gender quotas or a prize for national competitors in an international competition. We analyse the effects of creating an extra prize by reducing the prize in the main competition. Contestants differ in ability and agents with relatively low ability belong to a disadvantaged minority. All contestants compete for the main prize, but only disadvantaged agents can win the extra prize. We show that an extra prize is a powerful tool to ensure participation of disadvantaged agents.Moreover, for intermediate levels of the disadvantage of the minority, introducing an extra prize increases total equilibrium effort compared to a standard contest. Thus, even a contest designer not interested in affirmative action might establish an extra prize in order to enhance competition.

show abstract

Section: The Modelmentioning

confidence: 99%

Affirmative action through extra prizes

Dahm

Esteve‐González

2018

Journal of Economic Behavior & Organization

Self Cite

View full text Add to dashboard Cite

show abstract

“…Consequently, we need two additional equations in order to solve the system. One such equation is obtained by noticing that since individuals are not budget constrained, and the total prize and the unit cost of e¤ort are the same, in equilibrium we must have: P m j=1 x ij = P m j=1 x ij : This equality relation can be easily shown by rewriting the system of …rst order conditions (18) in the form: and, then summing over all issues j = 1; :::; m for each i = 1; 2: The last independent equation is obtained by any of the …rst order conditions in the system (18). After some algebra, on this system of 2m equations, we obtain the unique solution given by expression (17), from where expression (8) is a particular case.…”

Section: General Results and Proofsmentioning

confidence: 99%

Conflict and Competition over Multi-Issues

Osório¹

2018

The B.E. Journal of Theoretical Economics

View full text Add to dashboard Cite

Real life disputes, negotiations and competitive situations involve multi-issue considerations in which the …nal outcome depends on the aggregated e¤ort over several dimensions. We consider two allocation systems, the I-system, in which each issue is disputed and award independently, and the A-system, in which all issues are aggregate in a single prize award. In the A-system, we propose a contest success function that aggregates the individuals' multi-issue e¤orts in a single outcome. Among other results, we found that the A-system tends to induce higher total e¤ort than the I-system.The model is also able to reproduce a large set of strategic behaviors. For instance, under decreasing returns to e¤ort, individuals maximize their payo¤s by distributing e¤ort over all issues, while under increasing returns to e¤ort, individuals focus on a single issue. Hybrid equilibria, in which one individual focus in a single issue while the other individual diversi…es e¤ort over all issues, may also emerge when individuals hold di¤erent returns to e¤ort. Strategic behavior is simultaneously in ‡uenced by the weight of each issue on the …nal outcome and by comparative advantages. Throughout the manuscript, we link our results with strategic behavior observed in electoral competition, i.e., "issue ownership", "issue divergence/convergence" and "common value issues". We expect that our …ndings will help researchers and practitioners to better understand the process of endogenous selection of issues in competitive contexts and to provide guidance in the implementation of the optimal allocation mechanism. JEL: C72, D72, D74, D81.

show abstract

“…32 The fact that e l,2 =êw,2 comes from the addition of effective effort. See Dahm and Porteiro (2008) for a related result in a different context and other function forms.…”

Section: Continuous Efforts and A Generalized Csfmentioning

confidence: 99%

“…This paper considers a CES function to relate the bias (service 1 effort) with the contest 2 effort. Although this function is less general than the one used by Dahm and Porteiro (2008), it highlights the importance of the degree of substitution between efforts for the results that are obtained. A multiplicative bias implies that efforts are more complementary 7 The multiplicative bias in the Tullock CSF was introduced by Clark and Riis (1998).…”

Section: Introductionmentioning

confidence: 98%

See 1 more Smart Citation

Moral hazard in repeated procurement of services

Esteve‐González

2016

International Journal of Industrial Organization

View full text Add to dashboard Cite

This paper analyzes repeated procurement of services as a four-stage game divided into two periods. In each period there is (1) a contest stageà la Tullock in which the principal selects an agent and (2) a service stage in which the selected agent provides a service. Since this service effort is non-verifiable, the principal faces a moral hazard problem at the service stages. This work considers how the principal should design the period-two contest to mitigate the moral hazard problem in the period-one service stage and to maximize total service and contest efforts. It is shown that the principal must take account of the agent's past service effort in the period-two contest success function. The results indicate that the optimal way to introduce this 'bias' is to choose a certain degree of complementarity between past service and current contest efforts. This result shows that contests with 'additive bias' ('multiplicative bias') are optimal in incentive problems when effort cost is low (high). Furthermore, it is shown that the severity of the moral hazard problem increases with the cost of service effort (compared to the cost of contest effort) and the number of agents. Finally, the results are extended to more general contest success functions. JEL classification: C72; D82Key words: Biased contests; Moral Hazard; Repeated Game; Incentives. * I am indebted to Matthias Dahm and Bernd Theilen for reading this paper and providing detailed comments. I thank José Alcalde, Enriqueta Aragonès, Andrew Clausen, Maria Cubel, Ricardo Flores-Fillol, Kohei Kawamura, René Kirkegaard, Inés Macho-Stadler, Carolina Manzano, Jordi Massó, Juan de Dios Moreno-Ternero, Ana Nuevo-Chiquero, David Pérez-Castrillo, Antonio Quesada, María Montero, Nicolás Porteiro, and Santiago Sánchez-Pages for their helpful comments. I am also grateful to all members of the GRODE and to the participants at seminars, conferences and workshops

show abstract

Biased contests

Abstract: Endogenous contests, Contest success function, Information provision, C72, D72, D74,

Cited by 14 publications

References 15 publications

Affirmative action through extra prizes

Affirmative action through extra prizes

Conflict and Competition over Multi-Issues

Moral hazard in repeated procurement of services

Contact Info

Product

Resources

About