Your Failure is My Opportunity - Eff ects of Elimination in Contests

Moritz Mendel, Ferdinand Pieroth, Christian Seel

Research output: Working paperProfessional

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Abstract

In this paper, we consider a sequence of multi-prize all-pay auctions, where the contestants who exert the lowest e fforts in a round are eliminated.
We analyze if and how the behavior of contestants is influenced by the possibility that strong rivals are eliminated along the way. The conditions under which behavior is not influenced are rather restrictive. For cases where these conditions are not met, we derive equilibria in a two-period model. We compare our equilibrium predictions to those of a static model and a two-stage contest where the sequential structure is not announced in the first round.
Original languageEnglish
PublisherMaastricht University, Graduate School of Business and Economics
Number of pages34
Publication statusPublished - 6 Jun 2019

Keywords

  • elimination contest
  • identity-dependent externality

Cite this

Mendel, M., Pieroth, F., & Seel, C. (2019). Your Failure is My Opportunity - Eff ects of Elimination in Contests. Maastricht University, Graduate School of Business and Economics.
Mendel, Moritz ; Pieroth, Ferdinand ; Seel, Christian. / Your Failure is My Opportunity - Eff ects of Elimination in Contests. Maastricht University, Graduate School of Business and Economics, 2019.
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Mendel, M, Pieroth, F & Seel, C 2019 'Your Failure is My Opportunity - Eff ects of Elimination in Contests' Maastricht University, Graduate School of Business and Economics.

Your Failure is My Opportunity - Eff ects of Elimination in Contests. / Mendel, Moritz; Pieroth, Ferdinand; Seel, Christian.

Maastricht University, Graduate School of Business and Economics, 2019.

Research output: Working paperProfessional

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N2 - In this paper, we consider a sequence of multi-prize all-pay auctions, where the contestants who exert the lowest e fforts in a round are eliminated.We analyze if and how the behavior of contestants is influenced by the possibility that strong rivals are eliminated along the way. The conditions under which behavior is not influenced are rather restrictive. For cases where these conditions are not met, we derive equilibria in a two-period model. We compare our equilibrium predictions to those of a static model and a two-stage contest where the sequential structure is not announced in the first round.

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Mendel M, Pieroth F, Seel C. Your Failure is My Opportunity - Eff ects of Elimination in Contests. Maastricht University, Graduate School of Business and Economics. 2019 Jun 6.