Optimal Accuracy of Unbiased Tullock Contests with Two Heterogeneous Players

Arbeitspapier

I characterize the optimal accuracy level r of an unbiased Tullock contest between two players with heterogeneous prize valuations. The designer maximizes the winning probability of the strong player or the winner's expected valuation by choosing a contest with an all-pay auction equilibrium (r ≥ 2). By contrast, if she aims at maximizing the expected aggregate effort or the winner's expected effort, she will choose a contest with a pure-strategy equilibrium, and the optimal accuracy level r < 2 decreases in the players' heterogeneity. Finally, a contest designer who faces a tradeoff between selection quality and minimum (maximum) effort will never (may) chose a contest with a semi-mixed equilibrium.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 9601

Classification and Topics

• Classification: Wirtschaft ; Noncooperative Games ; Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
• Subject: Tullock contest ; heterogeneous valuations ; accuracy ; discrimination ; optimal design ; all-pay auction

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Sahm, Marco
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2022

Further information

• Handle: http://hdl.handle.net/10419/252118
• Last update: 10.03.2025, 11:41 AM CET