Contests & Conflict | 12/02/2020 | 06:00 PM
Momentum and Heterogeneity in Contests

Speaker: Stefano Barbieri, Tulane University

Stefano Barbieri will present his paper (joint work with Marco Serena - Max Planck Institute for Tax Law and Public Finance) titled "Momentum and Heterogeneity in Contests".

Abstract of the paper:
In sequential contests between ex-ante symmetric players, the outcome of early battles creates an asymmetry in players' incentives to expend resources, which undermines future expenditures. This dynamic force is absent in simultaneous contests, and consequently expenditures in sequential contests are smaller than in simultaneous ones. But if players are not ex-ante symmetric, it is a priori not clear what happens to players' incentives to expend resources in sequential contests. We find that the answer depends on the nature of the heterogeneity. If a player is stronger in every battle, then expenditures in sequential contests are still smaller than in simultaneous ones. However, if players' advantages are allowed to vary and alternate across battles, then a reversal of the result obtains for sufficiently strong asymmetry, and expenditures in sequential contests are greater than in simultaneous ones.

Chair: Dan Kovenock, Co-Chair: Iryna Topolyan

Contact Person

Event Team

Max-Planck-Institut für Steuerrecht und Öffentliche Finanzen

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80539 München

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