Mixed equilibria in Tullock contests

By Christian Ewerhart. Economic Theory, 2014

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Any symmetric mixed-strategy equilibrium in a Tullock contest with intermediate values of the decisiveness parameter (“2<R<∞\documentclass[12pt]{minimal} \usepackage{amsmath} \usepackage{wasysym} \usepackage{amsfonts} \usepackage{amssymb} \usepackage{amsbsy} \usepackage{mathrsfs} \usepackage{upgreek} \setlength{\oddsidemargin}{-69pt} \begin{document}$$2<R<\infty $$\end{document}”) has countably infinitely many mass points. All probability weight is concentrated on those mass points, which have the zero bid as their sole point of accumulation. With contestants randomizing over a non-convex set, there is a cost of being “halfhearted,” which is absent from both the lottery contest and the all-pay auction. Numerical bid distributions are generally negatively skewed and exhibit, for some parameter values, a higher probability of ex-post overdissipation than the all-pay auction.

Subfields: Economics and Econometrics, General Decision Sciences, Safety Research

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