Asymmetric technologies in contests |
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| Institution: | 1. Department of Economics, University of Ioannina, Ioannina, Greece;2. Athens University of Economics and Business, Patission 76, Athens, 10434, Greece;1. Agricultural and Applied Economics, Texas Tech University, Lubbock, TX, 79409, USA;2. Department of Economics, University of Wisconsin, La Crosse, La Crosse, WI, 54601, USA;3. Rawls College of Business, Texas Tech University, Lubbock, TX, 79409, USA |
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| 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. |
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| Keywords: | Contests Asymmetry Technology C72 D72 |
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