Your Failure is My Opportunity - Effects of Elimination in Contests

Moritz Mendel, Ferdinand Pieroth, Christian Seel*

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

In this paper, we consider a sequence of multi-prize all-pay auctions, where low-performing players are eliminated along the way. We provide sufficient conditions such that equilibrium behavior is unaffected by the prospects of winning prizes in later rounds. When these conditions are not met, we identify a novel externality effect and derive equilibria in a model with two rounds. We compare our results to knockout tournaments in which players are partitioned into subcontests in each round.
Original languageEnglish
Article number102495
Number of pages10
JournalJournal of Mathematical Economics
Volume95
DOIs
Publication statusPublished - Aug 2021

Keywords

  • Elimination contest
  • Identity-dependent externality
  • TOURNAMENTS
  • INCENTIVES
  • PRIZES

Cite this