Sharing the E昀fort Costs in Group Contests

摘要

This paper addresses conflicts between two groups when trying to win a group-specific public good prize.rnWe analyze how these contests are affected when groups are led by an organizer with the capacity to imposerntransfers to share the costs of individual efforts within the group. The technology of conflict that we use is thernTullock Contest Success Function with a perfect substitute impact function. We first describe centralized levelsrnof group effort - those that organizers wish to attain - and compare with efforts when individuals act noncooperatively.rnIn the model a group underperforms when effort exerted by individuals in the non-cooperativernsetting is smaller than the centralized group effort. Otherwise, the group outperforms. We show that the largerrngroup always underperforms, while the smaller one only does so if its size is sufficiently close to the largerrngroup. Second, we characterize cost sharing schemes that implement group centralized levels of effort. Thesernschemes consist of sharing costs in an egalitarian way. And third, we examine the game in which organizersrncompete strategically in setting the cost-sharing scheme of their group. We show that while the cost-sharingrnscheme is the same for the larger group as in the implementation case, it is different for the smaller group.