Top Guns May Not Fire: Best-Shot Group Contests with Group-Specific Public Good Prizes

22 Pages Posted: 24 Sep 2011 Last revised: 1 May 2013

See all articles by Subhasish M. Chowdhury

Subhasish M. Chowdhury

University of Bath - Department of Economics

Dongryul Lee

Ulsan National Institute of Science and Technology (UNIST)

Roman M. Sheremeta

Case Western Reserve University

Date Written: April 27, 2013

Abstract

We analyze a group contest in which n groups compete to win a group-specific public good prize. Group sizes can be different and any player may value the prize differently within and across groups. Players exert costly efforts simultaneously and independently. Only the highest effort (the best-shot) within each group represents the group effort that determines the winning group. We fully characterize the set of equilibria and show that in any equilibrium at most one player in each group exerts strictly positive effort. There always exists an equilibrium in which only the highest value player in each active group exerts strictly positive effort. However, perverse equilibria may exist in which the highest value players completely free-ride on others by exerting no effort. We provide conditions under which the set of equilibria can be restricted and discuss contest design implications.

Keywords: best-shot technology, group contest, group-specific public goods, free-riding

JEL Classification: C72, D70, D72, H41

Suggested Citation

Chowdhury, Subhasish M. and Lee, Dongryul and Sheremeta, Roman M., Top Guns May Not Fire: Best-Shot Group Contests with Group-Specific Public Good Prizes (April 27, 2013). Journal of Economic Behavior and Organization, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1932469 or http://dx.doi.org/10.2139/ssrn.1932469

Subhasish M. Chowdhury

University of Bath - Department of Economics ( email )

Claverton Down
Bath, BA2 7AY
United Kingdom

HOME PAGE: http://https://sites.google.com/site/subhasishmc/

Dongryul Lee

Ulsan National Institute of Science and Technology (UNIST) ( email )

gil 50
Ulsan, 689-798
Korea, Republic of (South Korea)

Roman M. Sheremeta (Contact Author)

Case Western Reserve University ( email )

10900 Euclid Ave.
Cleveland, OH 44106
United States

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