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Games 2016, 7(3), 25; doi:10.3390/g7030025

Payoff Shares in Two-Player Contests

Faculty of Business and Economics, University of Basel, Peter Merian-Weg 6, Basel 4002, Switzerland
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Academic Editor: Ulrich Berger
Received: 12 August 2016 / Revised: 3 September 2016 / Accepted: 5 September 2016 / Published: 9 September 2016
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Abstract

In imperfectly discriminating contests with symmetric valuations, equilibrium payoffs are positive shares of the value of the prize. In contrast to a bargaining situation, players’ shares sum to less than one because a residual share of the value is lost due to rent dissipation. In this paper, we consider contests with two players and investigate the relationship between these equilibrium shares and the parameters of a class of asymmetric Tullock contest success functions. Our main finding is that any players’ shares that sum up to less than one can arise as the unique outcome of a pure-strategy Nash equilibrium for appropriate parameters. View Full-Text
Keywords: contests; pure-strategy equilibrium; rent-dissipation contests; pure-strategy equilibrium; rent-dissipation
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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MDPI and ACS Style

Häfner, S.; Nöldeke, G. Payoff Shares in Two-Player Contests. Games 2016, 7, 25.

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