Invites you to a

Microeconomics Theory seminar presented by

Ben Chen

(University of Sydney)

Contests with Generic Behavioral Success Functions

Wednesday 5 October

4.00pm – 5.00pm

Via Zoom: Meeting Link

Abstract: Two players in a contest game of complete information simultaneously spend to compete for a prize. They have heterogenous contest success functions (CSF). Instead of specifying a functional form for each CSF, the proposed game accommodates all functions that satisfy general and reasonable assumptions. Our assumptions not only capture oft-used functional forms, but also  well-documented behavioral traits that existing models cannot capture. These assumptions cover the standard case where each player’s probability of winning according to her belief equals her opponent’s probability of losing according to her opponent’s belief, and the non-standard case where these probabilities are not equal. Optimism/overconfidence, pessimism, non-common priors, and the possibility of a draw are among the well-documented phenomena captured by our game. We prove the existence of an interior Nash equilibrium with positive expenses. An application of our game offers novel insights on contestants’ incentives to settle or participate in litigation, wars for territorial gain or resources, and similar contests where any prize of winning is a transfer from the loser.

For further information contact: Microeconomics Theory seminar series coordinators Dr Mengke Wang (mengke.wang@sydney.edu.au) & Dr Mert Kimya (mert.kimya@sydney.edu.au)

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