TY - JOUR
AB - This paper examines the evolutionary stability of behaviour in contests where playersâ€™ participation can be stochastic. We find, for exogenously given participation probabilities, players exert more effort under the concept of a finite-population evolutionarily stable strategy (FPESS) than under Nash equilibrium (NE). We show that there is ex-ante overdissipation under FPESS for sufficiently large participation probabilities, if, and only if, the impact function is convex. With costly endogenous entry, players enter the contest with a higher probability and exert more effort under FPESS than under NE. Importantly, under endogenous entry, overdissipation can occur for all (Tullock) contest success functions, in particular those with concave impact functions.
AU - Gu, Yiquan
AU - Hehenkamp, Burkhard
AU - Leininger, Wolfgang
ID - 13148
JF - Journal of Economic Behavior & Organization
SN - 0167-2681
TI - Evolutionary equilibrium in contests with stochastic participation: Entry, effort and overdissipation
ER -