Welfare Maximizing Contest Success Functions When the Planner Cannot Commit

20 Pages Posted: 20 Apr 2011

See all articles by Luis C. Corchón

Luis C. Corchón

Charles III University of Madrid - Department of Economics

Matthias Dahm

University of Leicester - Department of Economics

Date Written: February 15, 2011

Abstract

We analyze how a contest organizer chooses optimally the winner when the contestants' efforts are already exerted and commitment to the use of a given contest success function is not possible. We define the notion of rationalizability in mixed-strategies to capture such a situation. Our approach allows to derive different contest success functions depending on the aims and attitudes of the decider. We derive contest success functions which are closely related to commonly used functions providing new support for them. By taking into account social welfare considerations our approach bridges the contest literature and the recent literature on political economy.

Suggested Citation

Corchón Diaz, Luis Carlos and Dahm, Matthias, Welfare Maximizing Contest Success Functions When the Planner Cannot Commit (February 15, 2011). Available at SSRN: https://ssrn.com/abstract=1814926 or http://dx.doi.org/10.2139/ssrn.1814926

Luis Carlos Corchón Diaz (Contact Author)

Charles III University of Madrid - Department of Economics ( email )

Calle Madrid 126
Getafe, 28903
Spain

Matthias Dahm

University of Leicester - Department of Economics ( email )

Department of Economics
Leicester LE1 7RH, Leicestershire LE1 7RH
United Kingdom

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