Winners' Efforts in Team Contests
30 Pages Posted: 21 Feb 2019
Date Written: January 17, 2019
The conventional wisdom for individualistic dynamic contests is that expected total effort is larger in a simultaneous than in a sequential contest, as only the latter is affected by the "discouragement" effect. In contrast, all temporal structures of team contests yield the same expected total effort, as shown by Fu, Lu, and Pan (2015)'s remarkable neutrality result. Rather than expected total effort, we analyze the consequences of different temporal structures of team contests on expected winners' efforts, a natural objective in a number of applications such as R&D races, elections, and sports. We show that, among all possible temporal structures, expected winners' efforts are maximized by a fully simultaneous and minimized by a fully sequential contest. This result thus parallels the conventional wisdom for individualistic contests. And the neutrality of expected total effort ceases to hold as soon as winners' and losers' efforts are not equally valuable.
Keywords: team contest, winners' efforts, temporal structures
JEL Classification: C72, D72, D74, D82
Suggested Citation: Suggested Citation