Properties of Contests
21 Pages Posted: 8 Dec 2016 Last revised: 4 Oct 2018
Date Written: March 18, 2018
We aim at characterizing which kind of functions can be rationalized as the best reply of payoff maximizing agents in contests for a fixed prize. We show that the rationalizability strongly differ between Decisive Contests, where the prize is allocated with certainty, and Possibly Indecisive Contests, where the prize may be not awarded. In the latter, any arbitrary set of best reply functions is rationalizable, thus "anything goes". In the former, on the contrary, the best reply functions have to satisfy strong conditions.
Keywords: Contest, Rationalization
JEL Classification: C62, C72
Suggested Citation: Suggested Citation