Template-Type: ReDIF-Paper 1.0
Author-Name: Spencer Bastani 
Author-Name-First: Spencer 
Author-Name-Last: Bastani 
Author-Email: spencer.bastani@lnu.se
Author-Workplace-Name: Department of Economics and Statistics, School of Business and Economics, Linnaeus University,Sweden
Author-Name: Thomas Giebe   
Author-Name-First: Thomas 
Author-Name-Last: Giebe   
Author-Email: thomas.giebe@lnu.se
Author-Workplace-Name: Department of Economics and Statistics, School of Business and Economics, Linnaeus University,Sweden
Author-Name: Oliver Gürtler 
Author-Name-First: Oliver 
Author-Name-Last: Gürtler 
Author-Email: oliver.guertler@uni-koeln.de
Author-Workplace-Name: Department of Economics, University of Cologne, Germany

Title: A General Framework for Studying Contests
Abstract: We develop a general framework for studying contests, including the well-known models of Tullock(1980) and Lazear & Rosen (1981) as special cases. The contest outcome depends on players’ efforts and skills, the latter being  subject to symmetric uncertainty. The model is tractable, because asymmetric equilibrium exists under general assumptions regarding production technologies and skill distributions. Using a link between our contest model and expected utility theory, we are able to derive new comparative statics results regarding how the size and composition of contests affect equilibrium effort, showing how standard results can be overturned. We also discuss the robustness ofour results to changes in the information structure and the implications of our findings for the optimal design of teams.
Length: 51 pages
Classification-JEL: C72, D74,D81,J23,M51
Keywords: contest theory, symmetric equilibrium, heterogeneity, risk, stochastic dominance

Creation-Date:  2020-06
File-URL: https://www.econtribute.de/RePEc/ajk/ajkdps/ECONtribute_005_2020.pdf
File-Format: Application/pdf
File-Function: First version, 2020
Number: 005
Handle: RePEc:ajk:ajkdps:005