Your Failure is My Opportunity - Effects of Elimination in Contests

33 Pages Posted: 23 Feb 2018 Last revised: 22 May 2019

See all articles by Moritz Mendel

Moritz Mendel

University of Bonn

Ferdinand Pieroth

Yale University - Department of Economics

Christian Seel

Maastricht University

Date Written: May 20, 2019

Abstract

In this paper, we consider a sequence of multi-prize all-pay auctions, where the contestants who exert the lowest efforts 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.

Keywords: Elimination contest, identity-dependent externality

JEL Classification: C72, D44

Suggested Citation

Mendel, Moritz and Pieroth, Ferdinand and Seel, Christian, Your Failure is My Opportunity - Effects of Elimination in Contests (May 20, 2019). Available at SSRN: https://ssrn.com/abstract=3122567 or http://dx.doi.org/10.2139/ssrn.3122567

Moritz Mendel

University of Bonn ( email )

Regina-Pacis-Weg 3
Postfach 2220
Bonn, D-53012
Germany

Ferdinand Pieroth

Yale University - Department of Economics ( email )

28 Hillhouse Ave
New Haven, CT 06520-8268
United States

Christian Seel (Contact Author)

Maastricht University ( email )

P.O. Box 616
Maastricht, 6200MD
Netherlands
0031 433883651 (Phone)

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