Date: 03.- 04. March 2023
Instructor: Dr. Marco Serena (Max Planck Institute for Tax Law and Public Finance)

Topics:

• Contests and conflicts
• Tullock contests
• All-pay auctions
• Applications of contests

Description:

The world has experienced hundreds of armed conflicts since the end of the Second World War. Armed conflicts are important contributors to poverty and underdevelopment. In recent decades, conflicts have increasingly become of interest to economists. In this course, we aim to introduce students to the economics of conflicts and related literature. Conflicts are economic, social, and political problems where agents exert costly efforts while competing over a certain resource.

The workshop provides a survey of the economic literature on the theory of conflicts and contests, starting from some of the earliest models. In addition, the workshop discusses current research directions and some recent papers that use contest models to address applied questions. The main goal of the workshop is to make students familiar with the two basic workhorse models used by researchers to model contests: namely, Tullock contests or all-pay auctions tools.

Prior knowledge of game theory is helpful.

This workshop is open for advanced masters students and PhD candidates. If you would like to participate, please send a short email describing your motivation, together with your CV to naira.kotb(at)uni-bamberg.de before 20.02.2023. You will be notified of your acceptance.

The course will be held in a hybrid-mode. Upon acceptance, participants must make their own travel arrangements for their stay in Bamberg, if the wish to participate in the workshop in person. No financial support is available.

About the Speaker:

Marco Serena is a senior researcher at the Max Planck Institute for Tax Law and Public Finance in Munich and has a Ph.D. in Economics from the University Carlos III of Madrid. A large part of Marco's research focuses on the theory of contests. He uses game theory to address applied questions in settings that can be modeled as contests. Examples range from workers competing for promotions or bonuses, to researchers competing for patents or grants, to politicians and parties running for office.

Schedule:

Friday, March 3th:

10:30-12:00      1) Introduction to contest models: applications and key ingredients

12:15-13:45      2) Tullock contests: the effect of prizes and number of players on efforts

14:30-16:00      3) Tullock contests: asymmetric abilities and sequential moves

16:15-17:45      4) Tullock contests: destructive efforts and sharing rules

18:00-19:30      5) Application of Tullock in recent literature: sequential contests with biases

Saturday, March 4th:

9:00-10:30        6) Mixed-strategy equilibria and the all-pay auction with complete information (1/2)

10:45-12:15      7) The all-pay auction with complete information (2/2)

13:00-14:30      8) The all-pay auction with private information

14:45-16:15      9) Practice exercises on all-pay auctions

16:30-18:00      10) Application of all-pay auction in recent literature: reputation in conflicts

Literature:

Barbieri, S., & Serena, M. (2022). Biasing dynamic contests between ex-ante symmetric players. Games and Economic Behavior, 136, 1-30.

Corchòn, L. C. (2007). The Theory of Contests: A Survey. Review of Economic Design, 11(2), 69-100.

Corchòn, L. C. and Serena, M. (2018). Contest Theory: A Survey. Handbook of Game Theory and Industrial Organization, Edward Elgar, 2018.

Fu, Q., & Wu, Z. (2019). Contests: Theory and topics. In Oxford Research Encyclopedia of Economics and Finance.

Konrad, K. (2009). Strategy and Dynamics in Contests. Oxford University, Press Inc. (New York).

Mealem Y. & Nitzan, S. (2016). Discrimination in contests. Review of Economic Design, 20(2), 145-172.

Nitzan, S. (1994). Modelling rent-seeking contests. European Journal of Political Economy, 10(1), 41-60.

Sisak, D. (2009). Multiple-prize contests – the optimal allocation of prizes. Journal of Economic Surveys. 23(1), 82-114.