Contests with general preferences
Dickson, Alexander and MacKenzie, Ian and Sekeris, Petros (2016) Contests with general preferences. 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.
| Creators(s): |
Dickson, Alexander  ORCID: https://orcid.org/0000-0001-9386-9036, MacKenzie, Ian and Sekeris, Petros;
| Item type: | Monograph(Working paper) |
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| ID code: | 57020 |
| Keywords: | 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: | 01 Jan 2021 03:04 |
| URI: | https://strathprints.strath.ac.uk/id/eprint/57020 |
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