Dynamic Multi‐Activity Contests

19 Pages Posted: 16 May 2012

See all articles by Maria Arbatskaya

Maria Arbatskaya

Hugo M. Mialon

Emory University - Department of Economics

Date Written: June 2012

Abstract

We develop a model of dynamic multi‐activity contests. Players simultaneously choose efforts in long‐run activities, observe each other's efforts in these activities, and then simultaneously choose efforts in short‐run activities. A player's long‐run and short‐run efforts complement each other in determining the player's probability of winning. We compare the outcomes of this two‐stage model to those of the corresponding model in which players choose efforts in all activities simultaneously. Interestingly, effort expenditures are always lower in the sequential multi‐activity contest than in the simultaneous multi‐activity contest. The implications of this result for the organization of military, litigation, innovation, academic, and sporting contests are highlighted.

Keywords: Commitment, complementarity, contest success function, rent dissipation

JEL Classification: C72, D72

Suggested Citation

Arbatskaya, Maria and Mialon, Hugo M., Dynamic Multi‐Activity Contests (June 2012). The Scandinavian Journal of Economics, Vol. 114, Issue 2, pp. 520-538, 2012, Available at SSRN: https://ssrn.com/abstract=2060817 or http://dx.doi.org/10.1111/j.1467-9442.2012.01695.x

Hugo M. Mialon

Emory University - Department of Economics ( email )

1602 Fishburne Drive
Atlanta, GA 30322
United States

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