Strategically Equivalent Contests
17 Pages Posted: 24 Oct 2012 Last revised: 24 Feb 2013
Date Written: October 23, 2012
We use a Tullock-type contest to show that intuitively and structurally different contests can be strategically equivalent. Strategically equivalent contests generate the same best response functions and, as a result, the same efforts. Two strategically equivalent contests, however, may yield different equilibrium payoffs. We propose a simple two-step procedure to identify strategically equivalent contests. Using this procedure, we identify contests that are strategically equivalent to the original Tullock contest, and provide new examples of strategically equivalent contests. Finally, we discuss possible contest design applications and avenues for future theoretical and empirical research.
Keywords: rent-seeking, contest, equivalence, contest design
JEL Classification: C72, D72, D74
Suggested Citation: Suggested Citation