TY - JOUR
T1 - Asymmetric technologies in contests
AU - Klunover, Doron
N1 - Publisher Copyright:
© 2022 Elsevier B.V.
PY - 2023/6
Y1 - 2023/6
N2 - I consider a contest between two risk-neutral players over a common-value prize, in which one player has a linear cost-of-effort function and the other a strictly convex cost-of-effort function f. I show that if the value of the prize is above (below) a certain threshold level, then the equilibrium aggregate effort in this contest is larger (smaller) than in a contest in which both players are characterized by the strictly convex cost-of-effort function f, and smaller (larger) than in a contest in which both players are characterized by a linear cost-of-effort function. Therefore, in contrast to the general result in the literature, asymmetry in contests can increase competition.
AB - I consider a contest between two risk-neutral players over a common-value prize, in which one player has a linear cost-of-effort function and the other a strictly convex cost-of-effort function f. I show that if the value of the prize is above (below) a certain threshold level, then the equilibrium aggregate effort in this contest is larger (smaller) than in a contest in which both players are characterized by the strictly convex cost-of-effort function f, and smaller (larger) than in a contest in which both players are characterized by a linear cost-of-effort function. Therefore, in contrast to the general result in the literature, asymmetry in contests can increase competition.
KW - Asymmetry
KW - Contests
KW - Technology
UR - http://www.scopus.com/inward/record.url?scp=85142315174&partnerID=8YFLogxK
U2 - 10.1016/j.ejpoleco.2022.102337
DO - 10.1016/j.ejpoleco.2022.102337
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AN - SCOPUS:85142315174
SN - 0176-2680
VL - 78
JO - European Journal of Political Economy
JF - European Journal of Political Economy
M1 - 102337
ER -