Effort Maximization in Asymmetric N-Person Contest Games

30 Pages Posted: 22 Oct 2009

See all articles by Jörg Franke

Jörg Franke

University of Dortmund - Department of Economics

Christian Kanzow

affiliation not provided to SSRN

Wolfgang Leininger

University of Dortmund - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Alexandra Väth

University of Würzburg - Institute of Mathematics

Multiple version iconThere are 2 versions of this paper

Date Written: July 1, 2009

Abstract

This paper provides existence and characterization of the optimal contest success function under the condition that the objective of the contest designer is total effort maximization among n heterogeneous players. Heterogeneity of players makes active participation of a player in equilibrium endogenous with respect to the specific contest success function adopted by the contest designer. Hence, the aim of effort maximization implies the identification of those players who should be excluded from making positive efforts.We give a general proof for the existence of an optimal contest success function and provide an algorithm for the determination of the set of actively participating players.This is turn allows to determine optimal efforts in closed form.An important general feature of the solution is that maximization of total effort requires at least three players to be active.

Keywords: Effort maximization, existence of solution, asymmetric contests, participation constraints

JEL Classification: C72, D72

Suggested Citation

Franke, Jörg and Kanzow, Christian and Leininger, Wolfgang and Väth, Alexandra, Effort Maximization in Asymmetric N-Person Contest Games (July 1, 2009). Ruhr Economic Paper No. 130, Available at SSRN: https://ssrn.com/abstract=1492153 or http://dx.doi.org/10.2139/ssrn.1492153

Jörg Franke (Contact Author)

University of Dortmund - Department of Economics ( email )

D-44221 Dortmund
Germany

Christian Kanzow

affiliation not provided to SSRN ( email )

Wolfgang Leininger

University of Dortmund - Department of Economics ( email )

D-44221 Dortmund
Germany
+49 231 755 3297 (Phone)
+49 231 755 3027 (Fax)

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Alexandra Väth

University of Würzburg - Institute of Mathematics ( email )

Sanderring 2
Würzburg, D-97070
Germany

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