Contests with Variable Rewards
|Speaker:||David Wettstein, Ben Gurion University|
|Date:||Friday 27 October 2000|
|Location:||Room 106 Streatam Court|
We study contests with variable rewards under both complete and incomplete information. In standard models, a reward to winning depends on an entrant's type; however, in our model it is also a function of his effort. We show that with compete information our approach may yield both similar and qualitatively different behavior to non-effort dependent reward models, while with incomplete information there is a potential for paradoxical behavior where a reduction in the rewards or an increase in costs may increase the average effort. Our approach shows new insight into literature on rent-seeking, lobbying, and innovation.