Optimal Sequential Contests
48 Pages Posted: 20 Feb 2018 Last revised: 24 Jan 2022
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Optimal Sequential Contests
Optimal Sequential Contests
Date Written: January 24, 2022
Abstract
I study sequential contests where the efforts of earlier players may be disclosed to later players by nature or by design. The model has a range of applications, including rent seeking, R&D, oligopoly, public goods provision, and tragedy of the commons. I show that information about other players' efforts increases the total effort. Thus, the total effort is maximized with full transparency and minimized with no transparency. I also show that in addition to the first-mover advantage, there is an earlier-mover advantage. Finally, I derive the limits for large contests.
Keywords: contest design, oligopoly, public goods, rent-seeking, R&D
JEL Classification: C72, C73, D72, D82, D74
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