Distributional Competition

TL;DR

This paper analyzes symmetric competition models where players select distributions over a performance index with convex costs, establishing equilibrium existence, properties, and applications to various economic contests.

Contribution

It introduces a framework for symmetric distributional competition, proving equilibrium existence and characterizing it through a first-order approach, with multiple economic applications.

Findings

Existence of symmetric equilibrium established.

Characterization of equilibrium via first-order conditions.

Applications to R&D, oligopoly, and rank-order contests.

Abstract

I study symmetric competitions in which each player chooses an arbitrary distribution over a one-dimensional performance index, subject to a convex cost. I establish existence of a symmetric equilibrium, document various properties it must possess, and provide a characterization via the first-order approach. Manifold applications--to R\&D competition, oligopolistic competition with product design, and rank-order contests--follow.