Complementarity in contests

Abstract

ABSTRACT:We examine how the probability of persuading an audience depends on resources expended by contending parties. We use a Bayesian approach whereby the audience makes inferences solely based on the evidence produced by the contestants. We …nd conditions that yield the well-known additive contest success functions, including the logit function. We also …nd conditions that produce a generalized "di¤erence" functional form. In all cases, there are three main determinants of audience choice: (i) the truth and other objective parameters of the environment; (ii) the biases of the audience; and (iii) the resources expended by the interested parties.JEL: C70, D20, D70

The role of markets on resource conflicts*

“…If they have sufficiently diminishing marginal productivity/utility, they will care enough about this that they will distort effort toward conflict 2 One of the conventional models to study the relationship between resources and conflict can be traced back to the contribution of Tullock (1980) on rent seeking. A generalization of production technologies has been considered by Skaperdas and Syropoulos (1998), and of preferences by Dickson et al (2018).…”

Trade with enemy: Economic interdependence and stability under anarchy

“…Hirchleifer (1991a) also argues that conflictual efforts may be moderated by interdependence between players in the conflict as an instrument of production, and Hirchleifer (1995) identifies the conditions of a stable anarchic system in the struggle for resources in which the resource size is endogenously determined. Skaperdas and Syropoulos (1998) show that complementarity in production can soft conflict. This appears quite similar to our result that complementarity in consumption between the military good and the economic good could lead to softening competition in military spending.…”

“…This appears quite similar to our result that complementarity in consumption between the military good and the economic good could lead to softening competition in military spending. In the models of Hirshleifer (1991a, 1995), Skaperdas (1992) and Skaperdas and Syropoulos (1998), however, there is only one consumption good, so there is no trade between the contestants. On the contrary, what drives our result is the possibility of trades that arises from the assumption that there are two complementary consumption goods even without complementarity in production.…”