Browsing by Subject "Tullock contests"

Now showing 1 - 3 of 3

Open Access
Contests over joint production on networks
(Wiley, 2020) Doğan, Serhat; Keskin, K.; Sağlam, Çağrı
We consider a network of heterogeneous agents where each edge represents a two‐player contest between the respective nodes. In these bilateral contests, agents compete over an endogenous prize jointly produced using their own contest efforts. We provide a necessary and sufficient condition for the existence of Nash equilibrium and characterize the equilibrium total effort for every agent. Our model has insightful results regarding the network type, that is, depending on whether the network is bipartite or nonbipartite. Finally, considering the sum of all expected utilities as an efficiency notion, we investigate the optimal network structure.
Open Access
Large tullock contests
(Springer Nature, 2023-05-25) Doğan, Serhat; Karagözoğlu, Emin; Sağlam, Çağrı; Keskin, K.
We characterize the equilibrium effort function of a large Tullock contest game with heterogeneous agents under mild conditions on the contest success function and effort cost function. Later, writing the equilibrium total effort explicitly under a uniform type distribution, we identify the effort-maximizing large Tullock contest. It is shown that the contest designer needs to increase the curvature of the effective effort function, thereby encouraging high-type agents to exert even higher efforts, as the curvature of the effort cost function increases or the support of the type distribution gets narrower.
Open Access
Sabotage in team contests
(Springer, 2019) Doğan, Serhat; Keskin, K.; Sağlam, Çağrı
In the contest literature, sabotage is defined as a deliberate and costly activity that damages the opponent’s likelihood of winning the contest. Most of the existing results suggest that, anticipating a possible sabotage, contestants would be discouraged from exerting high efforts. In this paper we investigate the act of sabotage in a team contest wherein team members exert costly efforts as a contribution to their team’s aggregate effort, which in turn determines the contest’s outcome. For the baseline model with no sabotage, there exists a corner equilibrium implying a free-rider problem in each team. As for the model with sabotage, our characterization of Nash equilibrium reveals two important results: (i) a unique interior equilibrium exists so that the free-rider problem no longer is a concern and (ii) the discouragement effect of sabotage vanishes for some players. On top of those conclusions, we investigate the team owner’s problems of prize allocation and team formation with the objective being to maximize his team’s winning probability.