Open AccessProperties of contests: Constructing contest success functions from best-responses
Author(s) -
Luı́s C. Corchón,
Marco Serena
Publication year - 2022
Publication title -
journal of dynamics and games
Language(s) - English
Resource type - Journals
eISSN - 2164-6074
pISSN - 2164-6066
DOI - 10.3934/jdg.2022001
Subject(s) - contest , certainty , mathematical economics , set (abstract data type) , stochastic game , style (visual arts) , computer science , economics , mathematics , epistemology , political science , philosophy , art , law , programming language , literature
We aim at characterizing the functions that could be explained (recoverable) as a best reply of payoff-maximizing players in contests for a fixed prize. We show that recoverability strongly differs between Decisive Contests, where the prize is allocated with certainty, and Possibly Indecisive Contests, where the prize might not be awarded. In the latter, any arbitrary set of best reply functions is recoverable, thus "anything goes." In the former, best reply functions have to satisfy strong conditions in some cases. We provide an outline of possible applications of our results to R & D and labor markets.