Contests with Group-Specific Public Goods and Complementarities in Efforts

Item Type Journal paper
Abstract This paper starts from the observation that in public-goods group contests, group impact can in general not be additively decomposed into some sum (of functions) of individual efforts. We use a CES-impact function to identify the main channels of influence of the elasticity of substitution on the behavior in and the outcome of such a contest. We characterize the Nash equilibria of this game and carry out comparative-static exercises with respect to the elasticity of substitution among group members' efforts. If groups are homogeneous (i.e. all group members have the same valuation and efficiency within the group), the elasticity of substitution has no effect on the equilibrium. For heterogeneous groups, the higher the complementarity of efforts of that group, the lower the divergence of efforts among group members and the lower the winning probability of that group. This contradicts the common intuition that groups can improve their performance by solving the free-rider problem via higher degrees of complementarity of efforts.
Authors Kolmar, Martin & Rommeswinkel, Hendrik
Journal or Publication Title Journal of Economic Behavior and Organization
Language English
Keywords Contests, Public Goods, Complementarities
Subjects economics
HSG Classification contribution to scientific community
Refereed Yes
Date May 2013
Publisher Elsevier
Place of Publication Amsterdam
Volume 89
Number Mai 2013
Page Range 9-22
Number of Pages 14
ISSN 0167-2681
ISSN-Digital 1879-1751
Publisher DOI
Depositing User Prof. Dr. Martin Kolmar
Date Deposited 17 Jun 2013 10:56
Last Modified 20 Jul 2022 17:16


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Kolmar, Martin & Rommeswinkel, Hendrik (2013) Contests with Group-Specific Public Goods and Complementarities in Efforts. Journal of Economic Behavior and Organization, 89 (Mai 2013). 9-22. ISSN 0167-2681

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