Contests with Variable Rewards

Economics

Speaker:David Wettstein, Ben Gurion University
Date: Friday 27 October 2000
Time: 16:15
Location: Room 106 Streatam Court

Further details

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.