Abstract
In this paper we study a rent-seeking contest where several groups compete for a prize which is a public good among players in a group. In the contest players in a group may evaluate the prize of the contest differently. We prove that such an asymmetric public-good contest with a general contest success function possesses a unique pure-strategy Nash equilibrium, where the equilibrium is unique in the sense that the total expenditure of each group is uniquely determined. We also present some comparative statics in the model.
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- 1.
For a private-good contest, Skaperdas (1996), Kooreman and Schoonbeek (1997) and Clark and Riis (1998) show that contest success function satisfies a set of reasonable axioms if and only if the contest success function has a functional form in Assumptions 1, 3 or 4, depending on the choice of the reasonable axioms.
- 2.
Assuming u i I to be \(V _{i}^{I}\left /\right. N\) instead of zero does not affect the following analysis.
- 3.
- 4.
As before, if X = 0, then u I is defined to be zero or \(V _{I}\left /\right. N\).
- 5.
For the definition of mean preserving spreads, see Rothschild and Stiglitz (1970) .
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Acknowledgements
This research was in part supported by JSPS KAKENHI (Grants-in-Aid for Scientific Research) Numbers 19530151 and 24530194. A paper closely related with this paper was presented at PET15 (the 14th annual conference of the association for public economic theory) held in Luxembourg, 2015. I would like to thank an anonymous referee of this Festschrift and the participants in PET15 for many helpful comments and suggestions. Of course only I am responsible for any remaining errors and omissions.
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Yamazaki, T. (2016). On the Nash Equilibrium of Asymmetric Public-Good Contests. In: von Mouche, P., Quartieri, F. (eds) Equilibrium Theory for Cournot Oligopolies and Related Games. Springer Series in Game Theory. Springer, Cham. https://doi.org/10.1007/978-3-319-29254-0_16
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DOI: https://doi.org/10.1007/978-3-319-29254-0_16
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