Hybrid All-Pay and Winner-Pay Contests
American Economic Journal: Microeconomics (Forthcoming)
In many contests in economic and political life, both all-pay and winner-pay expenditures
matter for winning. This paper studies such hybrid contests under symmetry and
asymmetry. The symmetric model assumes very little structure but yields a simple closedform
solution. More contestants tend to lead to substitution toward winner-pay investments,
and total expenditures are always lower than in the corresponding all-pay contest.
With a biased decision process and two contestants, the favored contestant wins with
a higher likelihood, chooses less winner-pay investments, and contributes more to total
expenditures. An endogenous bias that maximizes total expenditures disfavors the highvaluation
contestant but still makes her the more likely one to win.