TY - JOUR
T1 - Top guns may not fire
T2 - Best-shot group contests with group-specific public good prizes
AU - Modak Chowdhury, Subhasish
AU - Lee, Dongryul
AU - Sheremeta, Roman M.
PY - 2013/8/1
Y1 - 2013/8/1
N2 - We analyze a group contest in which n groups compete to win a group-specific public good prize. Group sizes can be different and any player may value the prize differently within and across groups. Players exert costly efforts simultaneously and independently. Only the highest effort (the best-shot) within each group represents the group effort that determines the winning group. We fully characterize the set of equilibria and show that in any equilibrium at most one player in each group exerts strictly positive effort. There always exists an equilibrium in which only the highest value player in each active group exerts strictly positive effort. However, perverse equilibria may exist in which the highest value players completely free-ride on others by exerting no effort. We provide conditions under which the set of equilibria can be restricted and discuss contest design implications.
AB - We analyze a group contest in which n groups compete to win a group-specific public good prize. Group sizes can be different and any player may value the prize differently within and across groups. Players exert costly efforts simultaneously and independently. Only the highest effort (the best-shot) within each group represents the group effort that determines the winning group. We fully characterize the set of equilibria and show that in any equilibrium at most one player in each group exerts strictly positive effort. There always exists an equilibrium in which only the highest value player in each active group exerts strictly positive effort. However, perverse equilibria may exist in which the highest value players completely free-ride on others by exerting no effort. We provide conditions under which the set of equilibria can be restricted and discuss contest design implications.
KW - Best-shot technology
KW - Group contest
KW - Group-specific public goods
KW - Free-riding
UR - http://www.scopus.com/inward/record.url?scp=84879775988&partnerID=8YFLogxK
U2 - 10.1016/j.jebo.2013.04.012
DO - 10.1016/j.jebo.2013.04.012
M3 - Article
AN - SCOPUS:84879775988
SN - 0167-2681
VL - 92
SP - 94
EP - 103
JO - Journal of Economic Behavior and Organization
JF - Journal of Economic Behavior and Organization
ER -