Contests on networks

Abstract

We develop a model of contests on networks. Each player is connected to a set of contests and exerts a single effort to increase the probability of winning each contest to which she is connected. We explore how behavior is shaped by the pattern of interactions and characterize the networks that tend to induce greater effort; in particular, we show that the complete bipartite network is the unique structure that maximizes aggregate player effort. We also obtain a new exclusion result—akin to the Exclusion Principle of Baye et al. (Am Econ Rev 83(1):289-294, 1993)—which holds under the lottery CSF, and contrasts prior work in contests. Finally, new insight into uniqueness of equilibrium for network contest games is provided. Our framework has a broad range of applications, including research and development, advertising, and research funding.