Sabotage in team contests

AbstractIn the contest literature, sabotage is defined as a deliberate and costly activity that damages the opponent ’s likelihood of winning the contest. Most of the existing results suggest that, anticipating a possible sabotage, contestants would be discouraged from exerting high efforts. In this paper we investigate the act of sabotage in a team contest wherein team members exert costly efforts as a contribu tion to their team’s aggregate effort, which in turn determines the contest’s outcome. For the baseline model with no sabotage, there exists a corner equilibrium implying a free-rider problem in each team. As for the model with sabotage, our characterization of Nash equilibrium reveals two impor tant results: (i) a unique interior equilibrium exists so that the free-rider problem no longer is a concern and (ii) the discouragement effect of sabotage vanishes for some players. On top of those conclusions, we investigate the team owner’s problems of prize allocation and team formation with t he objective being to maximize his team’s winning probability.

Source: European Journal of Applied Physiology - April 1, 2019 Category: Physiology Source Type: research