Abstract
I consider a contest between two risk-neutral players over a common-value prize, in which one player has a linear cost-of-effort function and the other a strictly convex cost-of-effort function f. I show that if the value of the prize is above (below) a certain threshold level, then the equilibrium aggregate effort in this contest is larger (smaller) than in a contest in which both players are characterized by the strictly convex cost-of-effort function f, and smaller (larger) than in a contest in which both players are characterized by a linear cost-of-effort function. Therefore, in contrast to the general result in the literature, asymmetry in contests can increase competition.
Original language | English |
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Article number | 102337 |
Journal | European Journal of Political Economy |
Volume | 78 |
DOIs |
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State | Published - Jun 2023 |
Externally published | Yes |
Keywords
- Asymmetry
- Contests
- Technology