Payoff Shares in Two-Player Contests
In imperfectly discriminating contests with symmetric valuations, equilibrium payoffs are positive shares of the value of the prize. In contrast to a bargaining situation, players’ shares sum to less than one because a residual share of the value is lost due to rent dissipation. In this paper, we co...
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MDPI AG
2016-09-01
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| Series: | Games |
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| Online Access: | http://www.mdpi.com/2073-4336/7/3/25 |
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doaj-0917b015bc3846b49ac498dde920fc102020-11-24T22:40:00ZengMDPI AGGames2073-43362016-09-01732510.3390/g7030025g7030025Payoff Shares in Two-Player ContestsSamuel Häfner0Georg Nöldeke1Faculty of Business and Economics, University of Basel, Peter Merian-Weg 6, Basel 4002, SwitzerlandFaculty of Business and Economics, University of Basel, Peter Merian-Weg 6, Basel 4002, SwitzerlandIn imperfectly discriminating contests with symmetric valuations, equilibrium payoffs are positive shares of the value of the prize. In contrast to a bargaining situation, players’ shares sum to less than one because a residual share of the value is lost due to rent dissipation. In this paper, we consider contests with two players and investigate the relationship between these equilibrium shares and the parameters of a class of asymmetric Tullock contest success functions. Our main finding is that any players’ shares that sum up to less than one can arise as the unique outcome of a pure-strategy Nash equilibrium for appropriate parameters.http://www.mdpi.com/2073-4336/7/3/25contestspure-strategy equilibriumrent-dissipation |
| collection |
DOAJ |
| language |
English |
| format |
Article |
| sources |
DOAJ |
| author |
Samuel Häfner Georg Nöldeke |
| spellingShingle |
Samuel Häfner Georg Nöldeke Payoff Shares in Two-Player Contests Games contests pure-strategy equilibrium rent-dissipation |
| author_facet |
Samuel Häfner Georg Nöldeke |
| author_sort |
Samuel Häfner |
| title |
Payoff Shares in Two-Player Contests |
| title_short |
Payoff Shares in Two-Player Contests |
| title_full |
Payoff Shares in Two-Player Contests |
| title_fullStr |
Payoff Shares in Two-Player Contests |
| title_full_unstemmed |
Payoff Shares in Two-Player Contests |
| title_sort |
payoff shares in two-player contests |
| publisher |
MDPI AG |
| series |
Games |
| issn |
2073-4336 |
| publishDate |
2016-09-01 |
| description |
In imperfectly discriminating contests with symmetric valuations, equilibrium payoffs are positive shares of the value of the prize. In contrast to a bargaining situation, players’ shares sum to less than one because a residual share of the value is lost due to rent dissipation. In this paper, we consider contests with two players and investigate the relationship between these equilibrium shares and the parameters of a class of asymmetric Tullock contest success functions. Our main finding is that any players’ shares that sum up to less than one can arise as the unique outcome of a pure-strategy Nash equilibrium for appropriate parameters. |
| topic |
contests pure-strategy equilibrium rent-dissipation |
| url |
http://www.mdpi.com/2073-4336/7/3/25 |
| work_keys_str_mv |
AT samuelhafner payoffsharesintwoplayercontests AT georgnoldeke payoffsharesintwoplayercontests |
| _version_ |
1725706358359064576 |