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Mixed equilibria in Tullock contests


Ewerhart, Christian (2014). Mixed equilibria in Tullock contests. Working paper series / Department of Economics 143, University of Zurich.

Abstract

Any symmetric mixed-strategy equilibrium in a Tullock contest with intermediate values of the decisiveness parameter ("2 < R < ∞") has countably infinitely many mass points. All probability weight is concentrated on those mass points, which have the zero bid as their sole point of accumulation. With contestants randomizing over a non-convex set, there is a cost of being "halfhearted," which is absent from both the lottery contest and the all-pay auction. Numerical bid distributions are generally negatively skewed, and exhibit, for some parameter values, a higher probability of ex-post overdissipation than the all-pay auction.

Any symmetric mixed-strategy equilibrium in a Tullock contest with intermediate values of the decisiveness parameter ("2 < R < ∞") has countably infinitely many mass points. All probability weight is concentrated on those mass points, which have the zero bid as their sole point of accumulation. With contestants randomizing over a non-convex set, there is a cost of being "halfhearted," which is absent from both the lottery contest and the all-pay auction. Numerical bid distributions are generally negatively skewed, and exhibit, for some parameter values, a higher probability of ex-post overdissipation than the all-pay auction.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Working Paper Series > Department of Economics
Dewey Decimal Classification:330 Economics
JEL Classification:C72, D72, C16
Uncontrolled Keywords:Tullock contest, mixed-strategy Nash equilibrium, analytical functions
Language:English
Date:March 2014
Deposited On:05 Mar 2014 15:22
Last Modified:05 Apr 2016 17:44
Series Name:Working paper series / Department of Economics
Number of Pages:19
ISSN:1664-7041
Official URL:http://www.econ.uzh.ch/static/wp/econwp143.pdf
Related URLs:http://www.econ.uzh.ch/static/workingpapers.php
Permanent URL: https://doi.org/10.5167/uzh-93905

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