Keep on Fighting: Dynamic Win Effects in an All-Pay Auction

Derek J. Clark, Tore Nilssen and Jan Yngve Sand

Memo 23/2014

 

We investigate a multi-period contest model in which a contestant.s present success gives an advantage over a rival in the future. How this win advantage affects contestants.efforts, and whether the laggard gives up or keep on fighting are key issues. We find that the expected effort of the laggard will always be higher than the rival at some stage in the series of contests, and this is most likely to happen when at a large disadvantage or at a late stage in the series.

[v2] June 2015 Memo pdf

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[v1] October 2014 Memo pdf 

Published Nov. 5, 2014 10:34 AM - Last modified Jan. 24, 2019 11:44 AM