Strategy and Dynamics in Contests

by Konrad, Kai A.

• ISBN13: 9780199549603
• ISBN10: 0199549605
• Format: Paperback
• Copyright: 2009-04-15
• Publisher: Oxford University Press

Summary

This book describes the theory structure underlying contests, in which players expend effort and/or spend money in trying to get ahead of one another. Uniquely, this effort is sunk and cannot be recovered, regardless of whether a player wins or loses in the competition. Such interactionsinclude diverse phenomena such as marketing and advertising by firms, litigation, relative reward schemes in firms, political competition, patent races, sports, military combat, war and civil war. These have been studied in the field of contest theory both within these specific contexts and at ahigher level of abstraction. The purpose of this book is to describe the fundamental common properties of these types of interactions and to uncover some common properties or laws that govern them. The book begins by describing the properties of static contests and tournaments. Aspects such as timing, entry, sabotage anddelegation are added and contest design issues such as the admission or exclusion of players and the structure of prizes are discussed. Further, structures are analysed in which players interact repeatedly in the same or different contest environments. Examples are inter-group conflict followed byintra-group rivalry, elimination tournaments and other dynamic contest structures.

Author Biography

Kai A. Konrad completed his Ph.D. in Economics in 1990 at the University of Munich. He has held teaching and research positions at the universities of Munich, Bonn and Bergen and at the University of California, Irvine. He currently holds a chair in Public Finance at the Free University of Berlin and is also a Director of a research unit at the Social Science Research Center Berlin (WZB). He is a Co-Editor of the Journal of Public Economics and on the editorial boards of several other journals. His research interests are focused on contests, conflict and tournaments in various institutional contexts.

Table of Contents

Preface and Acknowledgements

An Introduction to Contests

A definition

Examples

The structure of the book

Types of Contests

The first-price all-pay auction

Additive noise

The Tullock contest

Experimental evidence

Evolutionary success

Summary

Timing and Participation

Endogenous timing

Voluntary participation

Exclusion

Delegation

Summary

Cost and prize structure

Choice of cost

The structure of prizes

Endogenous prizes

Summary

Externalities

State lotteries and financing public goods

A loser's preference about who wins

Personnel economics and sabotage

Information externalities and campaigning

Inter-group contests and free riding

Conclusions

Nested contests

Exogenous sharing rules

The choice of sharing rules

Intra-group conflict

A strategy of analysis of nested contests

Alliances

The alliance formation puzzle

Solutions to the alliance formation puzzle

Summary

Dynamic battles

The elimination tournament

The race

The tug-of-war

Iterating incumbency fights

Endogenous fighting

Summary: the discouragement effect

Conclusions

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