Properties of Contests

21 Pages Posted: 8 Dec 2016 Last revised: 4 Oct 2018

See all articles by Luis C. Corchón

Luis C. Corchón

Universidad Carlos III de Madrid - Department of Economics

Marco Serena

Max Planck Institute for Tax Law and Public Finance

Date Written: March 18, 2018

Abstract

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

Corchón Diaz, Luis Carlos and Serena, Marco, Properties of Contests (March 18, 2018). Working Paper of the Max Planck Institute for Tax Law and Public Finance No. 2018-10. Available at SSRN: https://ssrn.com/abstract=2882537 or http://dx.doi.org/10.2139/ssrn.2882537

Luis Carlos Corchón Diaz

Universidad Carlos III de Madrid - Department of Economics ( email )

Calle Madrid 126
Getafe, 28903
Spain

Marco Serena (Contact Author)

Max Planck Institute for Tax Law and Public Finance ( email )

Marstallplatz 1
Munich, 80539
Germany

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