Offsetting Distortion Effects of Head Starts on Incentives in Tullock Contests

Abstract

In this study, we examine a contest scenario where each player possesses a distinct head start that skews their chances of winning, thereby creating incentive distortions from the efficient level and adversely affecting the contest designer. While affirmative action policies offer a straightforward solution to counteract these distortions, their implementation may not always be viable in real-life applications. We characterize the unique class of non-discriminatory contest success functions (CSF) that enables to achieve an efficient level of effort when there are two players. Additionally, we demonstrate that achieving a symmetric equilibrium is unattainable without affirmative action when the contest involves more than two players.