Multi-Activity Contests

31 Pages Posted: 13 Jul 2005 Last revised: 4 Jun 2012

See all articles by Maria N. Arbatskaya

Maria N. Arbatskaya

Emory University - Department of Economics

Hugo M. Mialon

Emory University - Department of Economics

Date Written: June 14, 2007

Abstract

In many contests, players can influence their chances of winning through multiple activities or "arms." We develop a simple model of multi-armed contests and axiomatize its contest success function. We then analyze the outcomes of the multi-armed contest and the effects of allowing or restricting arms. Restricting an arm increases total effort directed to other arms if and only if restricting the arm balances the contest. Restricting an arm tends to reduce rent dissipation because it reduces the discriminatory power of the contest. But it also tends to increase rent dissipation if it balances the contest. Less rent is dissipated if an arm is restricted as long as no player is excessively stronger than the other with that arm. If players are sufficiently symmetric in an arm, both players are better off if that arm is restricted. Nevertheless, players cannot agree to restrict the arm in equilibrium if their costs of using the arm are sufficiently low.

Keywords: Multi-Armed Contests, Axiomatization, Rent Dissipation, Discriminatory Power, Comparative Advantage, Pareto Improvement, Prisoners' Dilemma

JEL Classification: C72, D72

Suggested Citation

Arbatskaya, Maria and Mialon, Hugo M., Multi-Activity Contests (June 14, 2007). Emory Law and Economics Research Paper No. 05-14, Available at SSRN: https://ssrn.com/abstract=755027 or http://dx.doi.org/10.2139/ssrn.755027

Maria Arbatskaya

Emory University - Department of Economics ( email )

1602 Fishburne Drive
Atlanta, GA 30322
United States
404-727-2770 (Phone)
404-727-4639 (Fax)

HOME PAGE: http://economics.emory.edu/home/people/faculty/arbatskaya-maria.html

Hugo M. Mialon (Contact Author)

Emory University - Department of Economics ( email )

1602 Fishburne Drive
Atlanta, GA 30322
United States

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