Chasing Contests

Abstract

This paper proposes a dynamic research contest, namely chasing contest, in which two asymmetric contestants exert costly effort to accomplish two breakthroughs. The contestants are asymmetric in that one of them is present-biased and has already achieved one breakthrough (the leader), whereas the other is time-consistent and needs to achieve two breakthroughs to win (the chaser). The principal can choose between two disclosure policies: immediately announcing the chaser's first breakthrough (public chasing contest) or announcing only the final result (hidden chasing contest). We characterize the unique x-start and y-stop equilibrium under both disclosure policies, in which the leader starts working from an instant x to the end while the chaser stops exerting effort by the instant y. In addition, the chaser will never stop earlier in the hidden chasing contest, whereas a late deadline extends the leader's effort in the public contest.