Effort Discrimination and Curvature of Contest Technology in Conflict Networks

TL;DR

This paper analyzes how effort restrictions and contest technology curvature affect equilibrium efforts and payoffs in conflict networks, revealing neutrality under Tullock technology and curvature effects beyond it.

Contribution

It demonstrates a neutrality result for Tullock contest technology in conflict networks and explores how curvature influences welfare and effort beyond Tullock forms.

Findings

Neutrality of effort and payoffs under Tullock technology in semi-symmetric networks

Necessity of Tullock form for the neutrality result

Curvature of contest technology impacts welfare and effort effects

Abstract

In a model of interconnected conflicts on a network, we compare the equilibrium effort profiles and payoffs under two scenarios: uniform effort (UE) in which each contestant is restricted to exert the same effort across all the battles she participates, and discriminatory effort (DE) in which such a restriction is lifted. When the contest technology in each battle is of Tullock form, a surprising neutrality result holds within the class of semi-symmetric conflict network structures: both the aggregate actions and equilibrium payoffs under two regimes are the same. We also show that, in some sense, the Tullock form is necessary for such a neutrality result. Moving beyond the Tullock family, we further demonstrate how the curvature of contest technology shapes the welfare and effort effects.