Contests with Bilateral Delegation: Unobservable Contracts

Baik, Kyung Hwan and Kim, Jihyun (2014) Contests with Bilateral Delegation: Unobservable Contracts. Journal of Institutional and Theoretical Economics, 170 (3). pp. 387-405.

[img]
Preview
Text
Download (135kB) | Preview
Official URL: http://tse-fr.eu/pub/28438

Abstract

We study two-player contests in which, in order to win a prize, each player hires a delegate to expend effort on her behalf; neither party's delegation contract is revealed to the rival party when the delegates choose their effort levels. We obtain first the outcomes of this unobservable-contracts case. Next, we perform comparative statics of these outcomes with respect to the higher-valuation player's valuation for the prize. Finally, we compare the outcomes of the unobservable-contracts case with those of the observable-contracts case. We find, among other things, that the unobservability of delegation contracts narrows the gap between the delegates' equilibrium contingent compensation.

Item Type: Article
Language: English
Date: September 2014
Refereed: Yes
JEL codes: D72 - Economic Models of Political Processes - Rent-Seeking, Elections, Legislatures, and Voting Behavior
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 16 Mar 2015 14:49
Last Modified: 07 Mar 2018 13:23
OAI ID: oai:tse-fr.eu:28438
URI: http://publications.ut-capitole.fr/id/eprint/16559

Actions (login required)

View Item View Item

Downloads

Downloads per month over past year