Multi-player, Multi-prize, Imperfectly Discriminating Contests
Methodology and Computing in Applied Probability
This paper models success probability in imperfectly discriminating contests involving multiple players and multiple prizes. This, in fact, turns out to be a generalization of Tullock’s contest success function to a multi-player, multiple prizes. The model can be used to analyze efforts exerted by individuals in various real-life situations, like obtaining seats in congested public transportation vehicles or obtaining admission into elite educational institutes. We propose a “holistic” probability model, derive the equilibrium efforts exerted, and analyze those efforts, the associated total costs and total dissipation, and explore pricing and number of ‘seats’. The derivation provides a new rational for the multinomial Logit Model. It also derives formula for rent dissipation. We also discuss two extensions of the model.
de Palma, André and Munshi, Soumyanetra, "Multi-player, Multi-prize, Imperfectly Discriminating Contests" (2019). Journal Articles. 802.
Open Access, Green