UiS Working Papers in Economics and Finance,
University of Stavanger

Abstract: Group contest success functions are axiomatized for general production functions, focusing particularly on the additive production function and the multiplicative Cobb-Douglas production function. Essential for axioms supporting the additive production function, driven by substitutability across efforts, is the sufficiency of only one group member exerting effort. Essential for axioms supporting the multiplicative production function, driven by complementarity across efforts, is that all group members exert efforts. The additive production function is further supported by an axiom where adding an amount to one effort and subtracting the same amount from a second equivalent substitutable effort does not change the winning probabilities. The Cobb-Douglas production function is supported by a strong homogeneity axiom where an equiproportionate change in matched group member’s efforts does not affect the winning probabilities.

Keywords: Rent seeking; group; additive efforts; Cobb-Douglas; axiomatization; contest success function.

JEL-codes: C70; D72; D74

15 pages, September 15, 2016

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