Strategically Equivalent Contests

Strategically Equivalent Contests

Authors

Published

Theory and Decision, vol. 78, pp. 587-601, 2015

Website

http:// ideas.repec.org/p/pra/mprapa/55450.html

Abstract

Using a two-player Tullock-type contest we show that intuitively and structurally different contests can be strategically equivalent. Strategically equivalent contests generate the same best response functions and, as a result, the same equilibrium efforts. However, strategically equivalent contests may yield different equilibrium payoffs. We propose a simple two-step procedure to identify strategically equivalent contests. Using this procedure, we identify contests that are strategically equivalent to the original Tullock contest, and provide new examples of strategically equivalent contests. Finally, we discuss possible contest design applications and avenues for future theoretical and empirical research.