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Sad-Loser contests

Research output: Contribution to journalJournal articlepeer-review

Published
<mark>Journal publication date</mark>05/2012
<mark>Journal</mark>Journal of Mathematical Economics
Issue number3
Volume48
Number of pages8
Pages (from-to)155-162
Publication StatusPublished
<mark>Original language</mark>English

Abstract

We consider asymmetric winner-reimbursed contests. It turns out that such contests (Sad-Loser) have multiple internal pure-strategy equilibria (where at least two players are active). We describe all equilibria and discuss their properties. In particular, we find (1) that an active player is indifferent among all her non-negative choices and her expected payoff is zero in any internal equilibrium, (2) that a higher-value (stronger) player always spends less than a lower-value (weaker) player and therefore always has a lower chance to win a Sad-Loser contest in any internal equilibrium, and (3) a sufficient condition for a net total spending to be higher in a Sad-Loser contest than in the corresponding asymmetric contest.