Seminar

Tournaments

Mikhail Drugov (New Economic School, Moscow - Toulouse School of Economics)

April 25, 2017, 11:00–12:30

Toulouse

Room MS 001

Economic Theory Seminar

Abstract

We derive robust comparative statics for general rank-order tournaments with additive and multiplicative noise. For unimodal distributions of noise, we show that individual equilibrium effort is unimodal in the number of players when it is deterministic. For a stochastic number of players, the unimodality is preserved for changes in the number of players in the sense of first-order stochastic dominance under an additional log-supermodularity restriction. Aggregate equilibrium effort can be increasing, decreasing or nonmonotone in the number of players. Equilibrium effort decreases as noise becomes more dispersed, in the sense of dispersive order or appropriately defined entropy. All relevant results for the Tullock contest follow as a special case.