Contests with general preferences
Dickson, Alexander and MacKenzie, Ian and Sekeris, Petros (2016) Contests with general preferences. Preprint / Working Paper. Strathclyde Discussion Papers in Economics, Glasgow.
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Abstract
This article investigates contests when heterogeneous players compete to obtain a share of a prize. We prove the existence and uniqueness of the Nash equilibrium when players have general preference structures. Our results show that many of the standard conclusions obtained in the analysis of contests - such as aggregate effort increasing in the size of the prize and the dissipation ratio invariant to the size of the prize — may no longer hold under a general preference setting. We derive the key conditions on preferences, which involve the rate of change of the marginal rate of substitution between a player’s share of the prize and their effort within the contest, under which these counter-intuitive results may hold. Our approach is able to nest conventional contest analysis — the study of (quasi-)linear preferences — as well as allowing for a much broader class of utility functions, which include both separable and non-separable utility structures.
ORCID iDs
Dickson, Alexander
ORCID: https://orcid.org/0000-0001-9386-9036, MacKenzie, Ian and Sekeris, Petros;
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Item type: Monograph(Preprint / Working Paper) ID code: 57020 Dates: DateEvent13 June 2016PublishedKeywords: contest, general preferences, aggregative game, Economic Theory, Economics, Econometrics and Finance(all) Subjects: Social Sciences > Economic Theory Department: Strathclyde Business School > Economics Depositing user: Pure Administrator Date deposited: 21 Jul 2016 10:33 Last modified: 23 Sep 2021 00:57 URI: https://strathprints.strath.ac.uk/id/eprint/57020
CORE (COnnecting REpositories)
CORE (COnnecting REpositories)