Conflict and Competition Over Multi-Issues
33 Pages Posted: 2 Jun 2016 Last revised: 2 Feb 2018
Date Written: November 2, 2017
Real life disputes, negotiations or competitive situations involve multi-issue considerations; the final outcome depends on the aggregated effort over several dimensions. We consider two allocation systems. In one, each issue is disputed and award independently, while in the other all issues are aggregate and a single prize awarded. In the latter, we propose a contest success function that aggregates individuals' multi-issue efforts in a single outcome. Among other results, we show that the aggregated system tends to induce higher total effort than the independent system. The model is also able to reproduces a large set of strategic behaviors. For instance, under decreasing returns to effort individuals maximize their payoffs by distributing effort over all issues while under increasing returns to effort individuals focus on a single issue. Hybrid equilibria, in which one individual focus on a single issue while the other diversify effort over all issues, may also emerge when individuals hold different effort technologies. Strategic behavior is simultaneously influenced by the weight of each issue on the final outcome and comparative advantages considerations. Our findings help to understand the process of endogenous selection of issues and provide guidance on the choice of the optimal allocation system. We link our results to strategic behaviors frequently observed in electoral competition like "issue ownership", "issue divergence/convergence" or "common value issues".
Keywords: Contest success function, multi-issue competition, effort maximization, electoral competition
JEL Classification: C72, D72, D74, D81
Suggested Citation: Suggested Citation