Diamond in the Rough: A Tractable Team All-Pay Auction vis-a-vis Group-Conscious Selection
The DEMS Economics Seminar series is proud to host
Stefano Barbieri
(Tulane University)
with Iryna Topolyan
ABSTRACT
We consider team all-pay auctions with a wide range of effort complementarity. Within a team, efforts are coordinated via a public randomization device. We characterize the unique distribution of efforts in any equilibrium and analyze the effects of value dispersion, degree of complementarity, and team size. We show that this effort distribution could be achieved in a Bayes Nash equilibrium of a cheap talk game in which players engage in costless unmediated preplay communication. Our novel theoretical results shed light on how efforts to promote diversity affect performance when teams are facing competitive pressure. Efforts to promote diversity that expand the available pool of team members tend to rebalance the competition, which increases output. But not-group blind selection may unbalance the competition and reduce output, even if more productive team members are selected. While the imbalance between teams may be exacerbated by diversity mandates, it is possible to level the playing field completely by budget-neutral rebalancing between teams through taxes and transfers, resulting in a higher total output.
The seminar will be in presence, Seminar Room 2104, Building U7-2nd floor