I am grateful to two anonymous referees for their comments.
Heterogeneity of Players and Aggregate Effort in Contests
Article first published online: 18 OCT 2013
© 2013 Wiley Periodicals, Inc.
Journal of Economics & Management Strategy
Volume 22, Issue 4, pages 728–743, Winter 2013
How to Cite
Ryvkin, D. (2013), Heterogeneity of Players and Aggregate Effort in Contests. Journal of Economics & Management Strategy, 22: 728–743. doi: 10.1111/jems.12028
- Issue published online: 18 OCT 2013
- Article first published online: 18 OCT 2013
We explore the systematic effects of variation in players' heterogeneity on aggregate effort in contests. We show that if costs of effort are convex, a mean-preserving increase in the variation of players' abilities can lead to an increase or decrease in aggregate effort, both in contests of complete and incomplete information, depending on the curvature of the effort cost function. Specifically, if effort costs are not too steep, aggregate effort increases in ability variation, whereas if effort costs are sufficiently steep, aggregate effort decreases in ability variation.