Checking date: 04/07/2019

Course: 2019/2020

Topics in microeconomics (A)
Study: Master in Economic Analysis (68)

Coordinating teacher: FABRA PORTELA, NATALIA

Department assigned to the subject: Department of Economics

Type: Electives
ECTS Credits: 4.0 ECTS


Students are expected to have completed
Microeconomics I, Microeconomics II and Microeconomics III
Competences and skills that will be acquired and learning results.
The students will get a good background on the Theory of Contests and will be prepared to make research in this topic at the highest level.
Description of contents: programme
OUTLINE OF THE COURSE Papers marked with a star a classic papers. Papers with an hyphen in front are surveys or recent stuff. 1. Contests. Definition of a contest. Examples. - Corchón, L. (2007). "The theory of contests: a survey". Review of Economic Design 11, 69, 100. 2. Contest Success Functions. Tullock, Linear, Hirschleifer, All pay auction and others. Microfoundations: Axiomatization. The setting of a single decider. Cooperative foundations. * Tullock, G. (1980). "Efficient Rent-Seeking. In J. M. Buchanan, R. D. Tollison and G. Tullock (eds.) Towards a Theory of a Rent-Seeking Society, Texas A&M University Press: 97-112. * Hillman, A. and Riley, J. (1987). Politically Contestable Rents and Transfers.Economics and Politics, 1, 3, 17-39. * Hirshleifer, Jack (1989), Conflict and Rent-Seeking Success Functions: Ratio vs. Difference Models. Public Choice 63, 101,112. * Skaperdas, S. (1996): Contest Success Functions. Economic Theory 2, 283-290. * Baye, M., Kovenock, D., de Vries, C. (1996). "The all-pay auction with complete information". Economic Theory, 8, 2, 291-305. - Clark, D. and C. Riis (1998): Contest Success Functions: An Extension. Economic Theory 11, 201-204. - Corchón, L. (2000): "The Allocative E¤ects of Rent-Seeking." Journal of Public Economic Theory 2, 4, 483-491. - Corchón, L. and M. Dahm (2010). "Foundations for Contest Success Functions". Economic Theory, 43, 1 81-98. - Jia, H., Skaperdas, S., Vaidya, S. (2013). "Contest functions: Theoretical foundations and issues in estimation," International Journal of Industrial Organization, 31, 3, 211-222. - Corchón, L. and C. Beviá (2015). "Relative Di¤erence Contest Success Function". Theory and Decision, 78, 377-398, 2015. 3. Properties of Equilibrium and Applications. Symmetric Contests: Existence, comparative statics and uniqueness of equilibrium. Asymmetric Contests: Basic properties in a special case. Applications: Group contests, rent-seeking and economic performance, sabotage. Biology * Olson, M. (1965): The Logic of Collective Action. Harvard University Press. Chapters 1 and 2. * Perez-Castrillo, D. and T. Verdier (1992): A General Analysis of Rent-Seeking Games. Public Choice 73, 335-50. - E. Glaezer, R. La Porta, F. Silanes and A. Shleifer (2004): Do Institutions Cause Growth? Journal of Economic Growth 9, 271-303. - Cornes, R., and R. Hartley (2005). "Asymmetric Contests with General Technologies. Economic Theory 26, 4, 923-946. - Beviá, C. and L. Corchón (2006). "Rational Sabotage with Heterogeneous Agents". Berkeley Electronic J. in Theoretical Econ., Topics. 6, 1. - Corchón, L. (2007). "The theory of contests: a survey", op cit. - Chowdhury, S.M., Gürtler, O. (2015). "Sabotage in Contests: A Survey". Public Choice, 164, 1, 135-155. - Ostreiher, R., Pruett-Jones, S., Heifetz, A. (2012) "Asymmetric contests at the nest". Behavioral Ecology and Sociobiology, 66, 9, 1237-1246. 4. Extensions. Centralized vs decentralized contests. Auctions and contests. Entry. Affirmative action. Networks. - Azmat, G., and Möller, M. (2009). Competition amongst Contests. RAND Journal of Economics, 40, 743-768. - Yates, A. (2011). "Winner-pay contests". Public Choice, 147, 1, 93-106. - Brown, J. (2011) "Quitters Never Win: The (Adverse) Incentive E¤ects of Competing with Superstars". J. of Political Economy 119, 5, 982-1013 - Franke, J. (2012). The Incentive E¤ects of Leveling the Playing Field: An Empirical Analysis of Amateur Golf Tournaments". Applied Economics 44, 9, 1193-1200. - Franke, J. (2012). "A¢ rmative Action in Contest Games". European Journal of Political Economy 28, 1,. 105-118. - Calsamiglia, C., Franke, J., Rey-Biel, P. (2013). "The Incentive E¤ects of Affirmative Action in a Real Effort Tournament". Journal of Public Economics 15-31. - Franke, J. and T. Öztürk (2015). Conflict Networks (2015). Journal of Public Economics, 126, 104-113 - Corchón, L., Beviá, C. (2015). "Centralized vs Decentralized Contests". Economics Letters, 137(C), 32-35 5. Welfare Properties of Contests. Welfare losses of monopoly and the Coase theorem in rent-seeking societies. The design of optimal contests. Commitment problems. - Fullerton, R. L., McAfee, P. (1999). "Auctioning Entry into Tournaments". Journal of Political Economy, 107, 3, 573-605. - Corchón, L. (2007). "The Theory of Contests: a Survey", op. cit. - Corchón, L. and M. Dahm (2010). "Welfare Maximizing Contest Success Functions when the Planner Cannot Commit". Journal of Mathematical Economics, 47, 3, 309-317. - Franke, J., C. Kanzow, W. Leininger and A. Schwartz (2014). "Lottery versus All Pay Auction Contests: A Revenue Dominance Theorem". Games & Economic Behavior 83, 116-126. - Nitzan, S. and Mealem, Y. (2015). "Discrimination in Contests". WP 6. Dynamic contests. Two stage contests. Incentives to pre commit. Who should play First? Grand Contests. Endogenous strength. * Dixit, A. (1987). "Strategic Behavior in Contests". American Economic Review, 77, 5, 891-898. - Baik, K. and J. Shogren (1992). "Strategic Behavior in Contests: Comment" American Economic Review, 82, 1, 359-362. - Klumpp, T. and M. Polborn (2006). "Primaries and the New Hampshire Effect". Journal of Public Economics 90, 1073-1114. - Konrad, K. (2012). "Dynamic Contests and the Discouragement Effect," Revue déconomie politique, 122, 2, 233-256. - Corchón, L. and C. Beviá (2013). "Endogenous Strength in Conflicts". International Journal of Industrial Organization, 31, 3, 195-306. 7. Contests with ties and applications to sports - Szymanski, S. (2003). "The Assessment: The Economics of Sport". Oxford Review of Economic Policy, 19, 4, 467-77. - Cohen, C. and Sela, A. (2007). "Contests with Ties". The B.E. Journal of Theoretical Economics, 7, 1. - Blavatskyy, P. R., (2010). "Contest success function with the possibility of a draw: axiomatization". J. of Mathematical Economics 46, 2, 267-276. - Yildizparlak, A. (2014). "An Application of Contest Success Functions for Draws on European Soccer". Journal of Sports Economics, July, 12, 2017. 8. Contests with incomplete information - Malueg, D., and Yates, A., (2004). "Rent seeking with private values", Public Choice, 119, 161-178. - Wasser, C., (2013). "Incomplete information in rent-seeking contests", Economic Theory, 53, 1, 239-268 9. Experiments - Dechenaux, E., Kovenock, D., Sheremeta, R. (2015). "A Survey of Experimental Research on Contests, All-Pay Auctions and Tournaments". Experimental Economics, 18, 609-669, 2015. 10. War. Rationalist explanations for wars. Are democracies more or less prone to wars than autocracies? How to avoid war. * Hirshleifer, J. (1991). "The Paradox of Power." Economics & Politics 3, 177-200. * Skaperdas, S. (1992). "Cooperation, conflict, and power in the absence of property rights." American Economic Review 82, 4, 720-739. * Fearon, J. (1995). Rationalist Explanations for War. International Organization 49: 379-414. * Bueno de Mesquita, B., Smith, A., Siverson, R., and J. Morrow (2003). The Logic of Political Survival. The MIT Press. - Garfinkel, M. and S. Skaperdas (2007). Economics of Conflict: An Overview." T. Sandler and K. Hartley (ed.), Handbook of Defense Economics, N. Holland. - Jackson, M., Morelli, M. (2007). Political Bias and War. American Economic Review 97, 4, 1353-1373. - Jackson, M., Morelli, M. (2009). "The Reasons for Wars. An Updated Survey". C. Coyne (ed.) Handbook on the Political Economy of War, Elgar. - Beviá, C. and L. Corchón (2010). "Peace Agreements without Commitment". Games and Economic Behavior, 68, 469-487. - Corchón, L. and A. Yildizparlak (2013). "Give Peace a Chance: The Effect of Asymmetric Information on Peace". Journal of Economic Behavior and Organization 92, 116-126 - Baliga, S. and T. Sjostrom (2013). "Bargaining and War: A Review of Some Formal Models". Korean Economic Review, 29(2), 235-266. 11. Presentation of three faculty members of their latest research.
Learning activities and methodology
Students are expected to attend lecture, do home works every other week, read papers before lecture, prepare a paper presentation and do a final exam.
Assessment System
  • % end-of-term-examination 40
  • % of continuous assessment (assigments, laboratory, practicals...) 60
Additional Bibliography
  • Bennedsen, Morten, and Sven E. Feldmann... Lobbying legislatures. Journal of Political Economy. 2002
  • Caillaud, Bernard, and Jean Tirole. Consensus building: how to persuade a group. The American Economic Review. 2007
  • Dal Bo, Ernesto. Bribing Voters. American Journal of Political Science . 2007
  • Dekel, Eddie, Matthew O. Jackson, and AsherWolinsky. Vote buying: General elections. Journal of Political Economy. 2008
  • Grossman, Gene M., and Elhanan Helpman. Special interest politics. MIT press. 2001
  • Morgan, John, and Felix Várdy. 120.5 (2012): 986-1026.. Mixed motives and the optimal size of voting bodies. Journal of Political Economy. 2012
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