Universität zu Köln

Balart, Pau ORCID: 0000-0002-9088-537X, Flamand, Sabine ORCID: 0000-0003-2124-4592, Gürtler, Oliver ORCID: 0000-0001-7792-5325 and Troumpounis, Orestis ORCID: 0000-0003-1074-863X (2018). Sequential choice of sharing rules in collective contests. Journal of Public Economic Theory, 20 (5). 703 - 724. HOBOKEN: Wiley. ISSN 1467-9779

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Abstract

Groups competing for a prize need to determine how to distribute it among their members in case of victory. Considering competition between two groups of different size, we show that the small group's sharing rule is a strategic complement to the large group's sharing rule in the sense that if the small group chooses a more meritocratic sharing rule, the large group wishes to choose a more meritocratic rule as well. On the contrary, the large group's sharing rule is a strategic substitute to the small group's sharing rule, hence the timing of choice is crucial. For sufficiently private prizes, a switch from a simultaneous choice to the small group being the leader consists in a Pareto improvement and reduces aggregate effort. On the contrary, when the large group is the leader, aggregate effort increases. As a result, the equilibrium timing is such that the small group chooses its sharing rule first. If the prize is not private enough, the small group retires from the competition and switching from a simultaneous to a sequential timing may reverse the results in terms of aggregate effort. The sequential timing also guarantees that the small group never outperforms the large one.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Balart, Pau UNSPECIFIED orcid.org/0000-0002-9088-537X UNSPECIFIED Flamand, Sabine UNSPECIFIED orcid.org/0000-0003-2124-4592 UNSPECIFIED Gürtler, Oliver UNSPECIFIED orcid.org/0000-0001-7792-5325 UNSPECIFIED Troumpounis, Orestis UNSPECIFIED orcid.org/0000-0003-1074-863X UNSPECIFIED
URN:	urn:nbn:de:hbz:38-171121
DOI:	10.1111/jpet.12303
Journal or Publication Title:	Journal of Public Economic Theory
Volume:	20
Number:	5
Page Range:	703 - 724
Date:	2018
Publisher:	Wiley
Place of Publication:	HOBOKEN
ISSN:	1467-9779
Language:	English
Faculty:	Faculty of Management, Economy and Social Sciences
Divisions:	Center of Excellence C-SEB Faculty of Management, Economics and Social Sciences > Economics > Microeconomics, Institutions and markets > Professorship for Economics
Subjects:	Economics
Uncontrolled Keywords:	Keywords Language GROUP-SIZE PARADOX; RENT-SEEKING; STRATEGIC BEHAVIOR; PUBLIC-GOODS; EQUILIBRIUM; CONFLICT; STACKELBERG; DISSIPATION; LITIGATION; LEADERSHIP English Economics English
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/17112