Population uncertainty in contests |
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| Authors: | Roger B Myerson Karl Wärneryd |
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| Institution: | (1) Department of Economics, University of Chicago, 1126 East 59th Street, IL 60637 Chicago, USA;(2) Department of Economics, Stockholm School of Economics, Box 6501, 113 83 Stockholm, SWEDEN |
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| Abstract: | Summary. We study contests where the set of players is a random variable. If it is known for certain that there will be at least one participant, then aggregate contest expenditure in equilibrium is strictly lower in a contest with population uncertainty than in a non-uncertain contest with the same expected number of players. This suggests an explanation of, for example, why empirical studies show rent-seeking expenditures to be much lower than predicted by other theories.Received: 29 June 2003, Revised: 14 December 2004, JEL Classification Numbers:
C72, D44, D72, D82, K41.
Correspondence to: Karl Wärneryd |
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| Keywords: | Contests population uncertainty |
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