| Abstract: | We study a sequential elimination contest where contestants (e.g., campaigns) spend resources that are provided by strategic players called backers (e.g., donors). In the unique symmetric equilibrium, backers initially provide small budgets, increasing their contributions only if their contestant wins the preliminary round. If backers are only allowed to provide budgets at the start of the game, as opposed to before each round, spending is higher. When unspent resources are refunded to the backer, total spending is higher than when all resources are sunk costs. We also study an extension of the model with asymmetric players. |
