GT Lab Internal Seminar on December, 6: Dhritiman Gupta

Title:  Prize Sharing Rules in Collective Contests: Towards Strategic Foundations
Speaker: Dhritiman Gupta, HSE
Date & Time: December, 6; 15.00
Where: Kantemirovskaya str 3/1, 5th floor

Dhritiman Gupta (HSE) will give a talk on Optimal pricing and matching policy on two-sided platforms in the presence of disintermediation .

Time: 15.00
Abstract:In   this   paper   we   deal   with   situations   of   collective   contests   between   two   groups   over   a private prize. A well known way to divide the prize within the winning group is the   prize   sharing   rule   introduced   by  Nitzan  (1991).   Since   its   introduction   it   has   become   a   standard   in   the   collective   contests   literature.   Despite   its   popularity   this   rule   is   ad   hoc.   In   this   paper   we   try   to   provide   strategic   foundations   to   it.   To   achieve   that   aim   we introduce another rule which represents intra-group cooperation. We give both the   groups a choice between the prize sharing rules and cooperative rules in an appropri-   ately constructed game. We find that the prize sharing rules may indeed be chosen by   both groups in an equilibrium of a Coordination game, where the other equilibrium is   both groups choosing the cooperative rule. However, the equilibrium with cooperative   rules payoff dominates the one with the prize sharing rules. But, when we subject the   equilibria to the selection criterion of risk dominance and security principle, we find   that indeed the equilibrium with the prize sharing rules may be chosen under certain   circumstances. This helps us establish robust strategic foundations of the prize sharing rules.