Contest functions: Theoretical foundations and issues in estimation

Hao Jia, Stergios Skaperdas, Samarth Vaidya

Research output: Contribution to journalArticlepeer-review

78 Citations (Scopus)

Abstract

Contest functions (alternatively, contest success functions) determine probabilities of winning and losing as a function of contestants' effort. They are used widely in many areas of economics that employ contest games, from tournaments and rent-seeking to conflict and sports. We first examine the theoretical foundations of contest functions and classify them into four types of derivation: stochastic, axiomatic, optimally-derived, and microfounded. The additive form (which includes the ratio or "Tullock" functional form) can be derived in all four different ways. We also explore issues in the econometric estimation of contest functions, including concerns with data, endogeneity, and model comparison.

Original languageEnglish
Pages (from-to)211-222
Number of pages12
JournalInternational Journal of Industrial Organization
Volume31
Issue number3
DOIs
Publication statusPublished - May 2013
Externally publishedYes

Keywords

  • Advertising
  • Conflict
  • Litigation
  • Rent-seeking
  • Tournaments

ASJC Scopus subject areas

  • Industrial relations
  • Aerospace Engineering
  • Economics and Econometrics
  • Economics, Econometrics and Finance (miscellaneous)
  • Strategy and Management
  • Industrial and Manufacturing Engineering

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