Investment incentives in contests
Bibliographic Data
| ID | 21470573 |
|---|---|
| Authors | Derek J Clark (0000-0002-7355-4595, UiT The Arctic University of Norway), Tapas Kundu (0000-0003-1814-7230, corresponding author), Johann Reindl |
| Year | 2025 |
| Publication date | 2025-11-21 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Social Choice and Welfare (JOURNAL) |
| Journal identifiers | ISSN: 0176-1714 • E-ISSN: 1432-217X |
| Publisher | Springer Science and Business Media LLC (PUBLISHER) |
| DOI | 10.1007/s00355-025-01643-5 |
| OpenAlex | W4416459238 |
| Language | EN |
| References cited | 14 |
Competition among rivals is often modeled as a contest in which the probability of winning is increasing in own effort. We consider incentives for players to attempt to influence their winning chances by undertaking a pre-contest investment. Investment costs are private information, and the outcome is stochastic. We characterize equilibrium by a threshold of the cost parameter that determines investment, and delineate cases where all players invest and when only some do. We consider how the attractiveness of the investment prospect impacts the investment decision and expected contest effort. In particular, the probability of investment success has an interesting non-monotonic effect on investment behavior
Attractiveness · CONTEST · Incentive · Investment strategy · Public finance · Evolutionary Game Theory and Cooperation · Experimental Behavioral Economics Studies · Game Theory and Applications
| Citation velocity | historical |
|---|---|
| Highly cited | No |