Three essays on contests

This dissertation is comprised of three essays on the theory of economic contests. The first essay analyzes the endogenous formation of affirmative action college admissions rules, and examines how admissions rules affect college candidates' incentives to engage in academic effort. Affirmative action is viewed as an admissions rule that scales up the minority candidate's test score relative to her non-minority counterpart. We show that an academic quality oriented college maximizes the test score of its incoming class by adopting an admissions rule that favors the minority. In equilibrium, affirmative action induces both of them to invest more on educational attainment. This result reconciles the commonly perceived conflict between academic quality and diversity.; The second essay analyzes litigants' trade-offs between settlement and trial in the presence of one-sided asymmetric information. We model the dispute resolution process in a two-stage game. Litigants rationally commit to their legal outlays in trial if they fail to settle out of court during pretrial negotiation (stage one of the game). Our analysis provides insights into the effects of different legal presumptions (and concomitant burdens of proof) on litigants' incentives to settle. We parameterize legal presumption as the weight the court awards to the evidence proffered by each litigant. We find that when the defendant is the informed party, a pro-defendant doctrine encourages litigants to more frequently settle disputes.; The third essay focuses on the endogenous timing of moves in contests. We allow agents to choose the timing of their moves before the contest takes place. In contrast to the previous literature, we introduce information asymmetries across agents. We find that in all sequential move equilibria, the uninformed agent moves first. More generally we show that the order of agents' moves in a sequential contest is a regularity stemming from information asymmetries. Furthermore, under plausible assumptions, sequential moves Pareto dominates simultaneous moves (from the view point of the players) and also results in lower rent-seeking expenditures.