Balart, Pau and Chowdhury, Subhasish and Troumpounis, Orestis (2015) Linking individual and collective contests through noise level and sharing rules. Working Paper. Lancaster University, Department of Economics, Lancaster.
Full text not available from this repository.Abstract
We provide a theoretical link between the two most prominent ways of modeling individual and collective contests as proposed by Tullock (1980) and Nitzan (1991) respectively. By introducing Nitzan's sharing rule as a way of modeling individual contests we obtain a contest success function nesting a standard Tullock contest and a fair lottery. We first provide an equivalence result between the proposed contest and Tulllock's contest for the two-player set-up. We then employ this nested contest as a way of introducing noise in multi-player contests when in the Tullock contest a closed form solution for the equilibrium in pure strategies does not exist. We conclude by comparing the proposed contest with the existing ones in the literature.