A BEJTE Contributions article.

Abstract

We study two-player all-pay contests in which there is a positive probability of a tied outcome. We show that the players' efforts in equilibrium do not depend on the expected prize in the case of a tie given that this prize is smaller than the prize for winning. The implications of this result are twofold. First, in symmetric one-stage contests, the designer who wishes to maximize the expected total effort should not award a prize in the case of a tie which is larger than one-third of the prize for winning. Second, in multi-stage contests, the designer should not limit the number of stages (tie-breaks) but should allow the contest to continue until a winner is decided.

Submitted: June 10, 2007 · Accepted: October 22, 2007 · Published: December 7, 2007

Recommended Citation

Cohen, Chen and Sela, Aner (2007) "Contests with Ties," The B.E. Journal of Theoretical Economics: Vol. 7 : Iss. 1 (Contributions), Article 43.
Available at: http://www.bepress.com/bejte/vol7/iss1/art43