Bribing in team contests

Abstract

We study bribing in a sequential team contest with multiple pairwise battles. Allowing for asymmetries in winning prizes and marginal costs of effort, we present the conditions under which (i) a player in a team is offered a bribe by the owner of the other team and (ii) she accepts that bribe. We show that these conditions depend on the ratios of players’ winning prizes and marginal costs of effort: the team owner chooses to bribe the player with the most favorable winning prize to marginal cost of effort ratio, and offers a bribe that leaves her indifferent between accepting (and exerting zero effort) and rejecting (and exerting her optimal effort). In some cases, the competition between players and the negative consequences of one player receiving a bribe on the team performance can drag down the equilibrium bribe to zero. We also study the impact of changes in winning prizes and marginal costs of effort on the equilibrium bribing behavior.