Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/94100
Authors: 
Konrad, Kai A.
Kovenock, Dan
Year of Publication: 
2006
Series/Report no.: 
SFB/TR 15 Discussion Paper 122
Abstract: 
We study equilibrium in a multistage race in which players compete in a sequence of simultaneous move component contests. Players may win a prize for winning each component contest, as well as a prize for winning the overall race. Each component contest is an all-pay auction with complete information. We characterize the unique equilibrium analytically and demonstrate that it exhibits endogenous uncertainty. Even a large lead by one player does not fully discourage the other player, and each feasible state is reached with positive probability in equilibrium (pervasiveness). Total effort may exceed the value of the prize by a factor that is proportional to the maximum number of stages. Important applications are to war, sports, and R&D contests and the results have empirical counterparts there.
Subjects: 
all-pay auction
contest
race
conflict
multi-stage
R&D
endogenous uncertainty
preemption
discouragement
JEL: 
D72
D74
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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