Past exam of the mathematics course of the University of Cambridge 2015 iii Paper 42 2 Solution Created 2026-10-03 Updated 2026-10-06
Assume the usual continuous nonnegative valuation distribution, so ties occur only on zero-probability events. Put . In a monotone symmetric Bayesian Nash equilibrium, a type is first with probability and second with probability . Its rank-order expected prize allocation in is thereforeThe all-pay effort identity gives . It also verifies equilibrium directly: a type imitating type has utility , whose derivative is , so the true type is a best response.
In the first version of , the two contests have expected allocationsThere is no common effort budget, and quasilinear utility makes the two effort choices separable. Since , adding their all-pay effort identities yieldsThe equality holds type by type for aggregate effort, rather than only after taking expectations. The within-player correlation of the two efforts does not enter these additive expected payoffs.
For the second version of , let denote descending order statistics. The expected effort in a rank-order contest with prize vector isEquivalently, decompose the allocation into a unit award to the best player and a unit award to each of the best two players, then use revenue equivalence: the corresponding total auction payments are and . Two separate first-place contests with prize values one and two instead generateConsequentlyFor a nondegenerate continuous distribution, the inequality is strict. No regularity of virtual valuations is needed for this comparison. With a uniform distribution on , the two totals are and , giving a difference of .
Uniform-value multi-prize all-pay effort formula Created 2026-10-06 Updated 2026-11-05
Let players have independent values uniform on , unit effort costs, and equal prizes of size . In the symmetric Bayesian Nash equilibrium, total expected effort isThe support fixes the scale; a different uniform interval requires adjusting the order-statistic calculation.
One proof uses expected effort in a rank-order contest: only prize layer is nonzero, so total effort is . The corresponding descending order statistic of uniform values has mean . Equivalently, the all-pay effort identity gives , where the allocation derivative is a Beta distribution density with parameters .