Abstract

http://ssrn.com/abstract=2017279
 


 



Relative Difference Contest Success Function


Carmen Bevia


Universitat Autònoma de Barcelona - Departament d’Economia i d’Història Econòmica

Luis C. Corchón


Universidad Carlos III de Madrid - Department of Economics

May 29, 2013


Abstract:     
In this paper we present a Contest Sucess Function (CSF) which is homogeneous of degree zero and where the probabilities of winning the prize depend on the relative difference of efforts. With two agents, we present a necessary and sufficient condition for the existence of a Nash Equilibrium in pure strategies. This equilibrium is unique and interior. This condition does not depend on the size of the valuations as in absolute difference CSF. We prove that several properties of Nash equilibrium and Leader-Follower equilibrium with the Tullock CSF still hold in our framework. Finally, we consider the case of n players, generalize the previous condition and show that it is sufficient for the existence of a unique Nash equilibrium in pure strategies.

Number of Pages in PDF File: 33

Keywords: contest success functions, homogeneity of degree zero, difference

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Date posted: March 6, 2012 ; Last revised: April 11, 2014

Suggested Citation

Bevia, Carmen and Corchón, Luis C., Relative Difference Contest Success Function (May 29, 2013). Available at SSRN: http://ssrn.com/abstract=2017279 or http://dx.doi.org/10.2139/ssrn.2017279

Contact Information

Carmen Bevia
Universitat Autònoma de Barcelona - Departament d’Economia i d’Història Econòmica ( email )
Edifici B - Campus Bellaterra
Barcelona, 08193
Spain
935812190 (Phone)
935812012 (Fax)
Luis Carlos Corchón Diaz (Contact Author)
Universidad Carlos III de Madrid - Department of Economics ( email )
Calle Madrid 126
Getafe, 28903
Spain
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