28 Pages Posted: 24 Oct 2010 Last revised: 11 Nov 2014
Date Written: August 20, 2013
We consider a two-player contest model in which breakthroughs arrive according to privately observed Poisson processes. Each player's process continues as long as she exerts costly effort. The player who collects most breakthroughs until a predetermined deadline wins a prize.
We derive Nash equilibria of the game depending on the deadline. For short deadlines, there is a unique equilibrium in which players use identical cutoff strategies, i.e., they continue until they have a certain number of successes. If the deadline is long enough, the symmetric equilibrium distribution of an all-pay auction is an equilibrium distribution over successes in the contest. Expected efforts may be maximal for a short or intermediate deadline.
Keywords: Contest, All-Pay Auction, Research Tournament
JEL Classification: C72, C73, D81
Suggested Citation: Suggested Citation
Lang, Matthias and Seel, Christian and Strack, Philipp, Deadlines in Stochastic Contests (August 20, 2013). Journal of Mathematical Economics, Vol. 52, p. 134-142. Available at SSRN: https://ssrn.com/abstract=1696067 or http://dx.doi.org/10.2139/ssrn.1696067