First-price winner-takes-all contests

We introduce a unifying model for contests with perfect discrimination and show that it can be used to model many well-known economic situations, such as auctions, Bertrand competition, politically contestable rents and transfers, tax competition and litigation problems. Furthermore, we hope that the generality of our model can be used to study models of contests in settings in which they have not been applied yet. Our main result is a classification of the set of Nash equilibria of first-price winner-takes-all contests with complete information. Finally, we discuss the implications of our results in each one of the specific models.