Header

UZH-Logo

Maintenance Infos

Contests with small noise and the robustness of the all-pay auction - Zurich Open Repository and Archive


Ewerhart, Christian (2017). Contests with small noise and the robustness of the all-pay auction. Working paper series / Department of Economics 186, University of Zurich.

Abstract

This paper considers all-pay contests in which the relationship between bids and allocations reflects a small amount of noise. Prior work had focused on one particular equilibrium. However, there may be other equilibria. To address this issue, we introduce a new and intuitive measure for the proximity to the all-pay auction. This allows, in particular, to provide simple conditions under which actually any equilibrium of the contest is both payoff equivalent and revenue equivalent to the unique equilibrium of the corresponding all-pay auction. The results are shown to have powerful implications for monopoly licensing, political lobbying, electoral competition, optimally biased contests, the empirical analysis of rent-seeking, and dynamic contests.

Abstract

This paper considers all-pay contests in which the relationship between bids and allocations reflects a small amount of noise. Prior work had focused on one particular equilibrium. However, there may be other equilibria. To address this issue, we introduce a new and intuitive measure for the proximity to the all-pay auction. This allows, in particular, to provide simple conditions under which actually any equilibrium of the contest is both payoff equivalent and revenue equivalent to the unique equilibrium of the corresponding all-pay auction. The results are shown to have powerful implications for monopoly licensing, political lobbying, electoral competition, optimally biased contests, the empirical analysis of rent-seeking, and dynamic contests.

Downloads

28 downloads since deposited on 28 Jan 2015
8 downloads since 12 months
Detailed statistics

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, D45, D72, L12
Uncontrolled Keywords:Contests, increasing returns, mixed-strategy Nash equilibrium, robustness of the all-pay auction, payoff equivalence, revenue equivalence
Language:English
Date:June 2017
Deposited On:28 Jan 2015 10:33
Last Modified:15 Aug 2017 03:08
Series Name:Working paper series / Department of Economics
Number of Pages:38
ISSN:1664-7041
Additional Information:Revised version ; Former title: "Rent-seeking games and the all-pay auction"
Official URL:http://www.econ.uzh.ch/static/wp/econwp186.pdf
Related URLs:http://www.econ.uzh.ch/static/workingpapers.php

Download

Preview Icon on Download
Content: Published Version
Filetype: PDF (Version January 2015) - Registered users only
Size: 297kB
Preview Icon on Download
Content: Updated Version
Filetype: PDF (Revised version September 2016) - Registered users only
Size: 393kB
Preview Icon on Download
Preview
Content: Updated Version
Filetype: PDF (Revised version June 2017)
Size: 383kB

TrendTerms

TrendTerms displays relevant terms of the abstract of this publication and related documents on a map. The terms and their relations were extracted from ZORA using word statistics. Their timelines are taken from ZORA as well. The bubble size of a term is proportional to the number of documents where the term occurs. Red, orange, yellow and green colors are used for terms that occur in the current document; red indicates high interlinkedness of a term with other terms, orange, yellow and green decreasing interlinkedness. Blue is used for terms that have a relation with the terms in this document, but occur in other documents.
You can navigate and zoom the map. Mouse-hovering a term displays its timeline, clicking it yields the associated documents.

Author Collaborations