Contests—a comparison of timing and information structures

Abstract

We study a model of imperfectly discriminating contests with two ex ante symmetric agents. We consider four institutional settings: Contestants move either sequentially or simultaneously and in addition their types are either public or private information. We find that an effort-maximizing designer of the contest prefers the sequential to the simultaneous setting from an ex ante perspective. Moreover, the sequential contest Pareto dominates the simultaneous one when the contestants’ types are sufficiently negatively correlated. Regarding the information structure, the designer ex ante prefers private information while the contestants prefer public information.

This is a preview of subscription content, access via your institution.

References

  1. Aoyagi, M. (2010). Information feedback in a dynamic tournament. Games and Economic Behavior, 70, 242–260.

    Article  Google Scholar 

  2. Baik, K. H., & Shogren, J. F. (1992). Strategic behavior in contests: comment. American Economic Review, 82(1), 359–362.

    Google Scholar 

  3. Clark, D., & Riis, C. (1998). Contest success functions: an extension. Economic Theory, 11, 201–204.

    Article  Google Scholar 

  4. Dixit, A. (1987). Strategic behavior in contests. American Economic Review, 77(5), 891–898.

    Google Scholar 

  5. Glazer, A., & Hassin, R. (2000). Sequential rent seeking. Public Choice, 102, 219–228.

    Article  Google Scholar 

  6. Gradstein, M., & Konrad, K. (1999). Orchestrating rent seeking contests. Economic Journal, 109, 536–545.

    Article  Google Scholar 

  7. Harris, C., & Vickers, J. (1985). Perfect equilibrium in a model of a race. The Review of Economic Studies, 52(2), 193–209.

    Article  Google Scholar 

  8. Harris, C., & Vickers, J. (1987). Racing with uncertainty. The Review of Economic Studies, 54(1), 1–21.

    Article  Google Scholar 

  9. Hurely, T., & Shogren, J. (1998a). Effort levels in a Cournot Nash contest with asymmetric information. Journal of Public Economics, 69, 195–210.

    Article  Google Scholar 

  10. Hurely, T., & Shogren, J. (1998b). Asymmetric information contests. European Journal of Political Economy, 14, 645–665.

    Article  Google Scholar 

  11. Jackson, M. O., Simon, L. K., Swinkels, J. M., & Zame, W. R. (2002). Communication and equilibrium in discontinuous games of incomplete information. Econometrica, 70(5), 1711–1740.

    Article  Google Scholar 

  12. Jost, P.-J., & Kräkel, M. (2006). Simultaneous- and sequential-move tournaments with heterogeneous agents. Schmalenbach Business Review, 58, 306–331.

    Google Scholar 

  13. Konrad, K. A. (2007). Strategy in contests—an introduction. WZB-Markets and Politics Working Paper No. SP II 2007-01.

  14. Leininger, W. (1993). More efficient rent-seeking—a Münchhausen solution. Public Choice, 75, 43–64.

    Article  Google Scholar 

  15. Linster, B. (1993). Stackelberg rent-seeking. Public Choice, 77(2), 307–321.

    Article  Google Scholar 

  16. Ludwig, S. (2007). Essays on the effects of information on incentives and on people’s awareness and assessment of biases. Ph.D. thesis, University of Bonn.

  17. Ludwig, S. (2011). Contests—a comparison of timing and information structures. Discussion Papers in Economics, 12209, University of Munich.

  18. Malueg, D., & Yates, A. (2004). Rent seeking with private values. Public Choice, 119, 161–178.

    Article  Google Scholar 

  19. Moldovanu, B., & Sela, A. (2006). Contest architecture. Journal of Economic Theory, 126(1), 70–97.

    Article  Google Scholar 

  20. Morgan, J. (2003). Sequential contests. Public Choice, 116, 1–18.

    Article  Google Scholar 

  21. Münster, J. (2009). Repeated contests with asymmetric information. Journal of Public Economic Theory, 11(1), 89–118.

    Article  Google Scholar 

  22. Nitzan, S. (1994). Modeling rent seeking contests. European Journal of Political Economy, 10, 41–60.

    Article  Google Scholar 

  23. Pal, D. (1991). Cournot duopoly with two production periods and cost differentials. Journal of Economic Theory, 55, 441–448.

    Article  Google Scholar 

  24. Romano, R., & Yildirim, H. (2005). On the endogeneity of Cournot–Nash and Stackelberg equilibria: games of accumulation. Journal of Economic Theory, 102, 73–107.

    Article  Google Scholar 

  25. Rosen, S. (1986). Prizes and incentives in elimination tournaments. American Economic Review, 76(4), 701–715.

    Google Scholar 

  26. Saloner, G. (1987). Cournot duopoly with two production periods. Journal of Economic Theory, 42, 183–187.

    Article  Google Scholar 

  27. Simon, L. K., & Zame, W. R. (1990). Discontinuous games and endogenous sharing rules. Econometrica, 58(4), 861–872.

    Article  Google Scholar 

  28. Skaperdas, S. (1996). Contest success functions. Economic Theory, 7, 283–290.

    Google Scholar 

  29. Tullock, G. (1980). Efficient rent-seeking. In J. Buchanan et al. (Eds.), Toward a theory of the rent-seeking society (pp. 97–112). College Station: Texas A&M University Press.

    Google Scholar 

  30. Wärneryd, K. (2003). Information in conflicts. Journal of Economic Theory, 110, 121–136.

    Article  Google Scholar 

  31. Yildirim, H. (2005). Contests with multiple rounds. Games and Economic Behavior, 51, 213–227.

    Article  Google Scholar 

Download references

Author information

Affiliations

Authors

Corresponding author

Correspondence to Sandra Ludwig.

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Ludwig, S. Contests—a comparison of timing and information structures. Public Choice 153, 341–355 (2012). https://doi.org/10.1007/s11127-011-9797-8

Download citation

Keywords

  • Sequential contests
  • Asymmetric information
  • Rent-seeking

JEL Classification

  • D72
  • C72