Lotteries vs. All‐Pay Auctions in Fair and Biased Contests

Abstract

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What price the court of St. James? Political influences on ambassadorial postings of the United States of America

“…10 The total valuation that results is distinct from the mixed-strategy equilibrium probability value for bidders, which can be shown to increase in the valuation of the rent by the bidder, and decline in the number of contestants. 11 Anderson, Goeree, and Holt (1998) consider extensions to the case where bidders are subject to decision errors; Epstein, Mealem, and Nitzan (2013) consider the case of structural discrimination in awarding the prize. 12 The solutions presented below are Rubinstein (1982) and Shaked and Sutton (1984) consistent.…”

“… Anderson, Goeree, and Holt () consider extensions to the case where bidders are subject to decision errors; Epstein, Mealem, and Nitzan () consider the case of structural discrimination in awarding the prize.…”

Equity and effectiveness of optimal taxation in contests under an all-pay auction

“…This implies that the point E, which represents the interior equilibrium taxation scheme, must be to the right of A. That is, the reduced stake of contestant 1 is S See Epstein et al (2011b). efforts by fully taking advantage of the potential "income effect" associated with a scheme that increases the sum of the final stakes from ( )…”

Tullock contests may be revenue superior to auctions in a symmetric setting

“…1 On the other hand, Fang (2002) and Epstein et al (2013) have shown that a contest can achieve a higher revenue than an all-pay auction in asymmetric settings; Franke et al (2014) further argue that the presence of more than two players increases the chances of contests to achieve a higher revenue. In this paper, we show that a Tullock contest can generate a higher expected revenue even in an ex-ante symmetric setting with two players.…”