Investment on human capital in a dynamic contest model

dc.citation.epage23en_US
dc.citation.issueNumber1en_US
dc.citation.spage1en_US
dc.citation.volumeNumber23en_US
dc.contributor.authorKeskin, K.en_US
dc.contributor.authorSağlam, Hüseyin Çağrıen_US
dc.contributor.bilkentauthorSağlam, Hüseyin Çağrı
dc.date.accessioned2020-02-18T12:49:33Z
dc.date.available2020-02-18T12:49:33Z
dc.date.issued2019
dc.departmentDepartment of Economicsen_US
dc.description.abstractAlthough most contest games are modeled in such a way that the outcome depends only on the efforts exerted by the contestants, what is arguably more important is the contestants’ effective efforts which may be influenced also by their ability, human capital, strength, etc. In this paper, we investigate an extensive model including such an effectiveness parameter and analyze the optimal investment behavior in a dynamic conflict framework. At each period, two contestants compete for a common prize by choosing contest efforts and investment levels. Each contestant’s investment accumulates as his/her human capital which depreciates through time. Who wins the component contest at a particular period is determined by the contestants’ effective efforts, defined as increasing functions of their efforts and human capitals. Following the analysis of subgame perfect Nash equilibrium in a two-period model and of open-loop equilibrium in an infinite-horizon model, we provide intuitive comparative static results.en_US
dc.identifier.doi10.1515/snde-2017-0095en_US
dc.identifier.issn1081-1826
dc.identifier.urihttp://hdl.handle.net/11693/53416
dc.language.isoEnglishen_US
dc.publisherDe Gruyteren_US
dc.relation.isversionofhttps://dx.doi.org/10.1515/snde-2017-0095en_US
dc.source.titleStudies in Nonlinear Dynamics and Econometricsen_US
dc.subjectContestsen_US
dc.subjectDynamic contestsen_US
dc.subjectInvestmenten_US
dc.subjectEfectivenessen_US
dc.subjectHuman capitalen_US
dc.titleInvestment on human capital in a dynamic contest modelen_US
dc.typeArticleen_US
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