Sequential team contests: alternating or specializing?

In this article, the author analyze a sequential best-of-\((2n + 1)\) contest between two symmetric teams, each composed of two players, in which the all-pay-auction rules decide individual matches. In any match played while the outcome of the contest is uncertain, only one player in each team is active. In this setting, the main result is identifying how value heterogeneity within teams shapes team members' roles.\N\NIt is shown that: if value heterogeneity within teams is large, teammates ``specialize in equilibrium; the large-valuation member is active when teams are tied, or her team is ahead; furthermore, her equilibrium expected payoff at the beginning of the game is zero; the small-valuation member only contributes when her team is behind; furthermore, her equilibrium expected payoff at the beginning of the game is strictly positive; if value heterogeneity within teams is small, the equilibrium displays a role ``alternation between teammates in terms of who contributes in which situation (one's team is ahead, behind, or in a tie with the other).\N\NIn this case, the equilibrium payoff of the large-valuation member can be strictly positive, and the exploitation of the large-valuation member by the small-valuation member that is typical of a one-shot model does not go through.\N\NThe conclusion that can be drawn from the results obtained in this article is also interesting, namely: although alternation may be construed as superior cooperation within a team, it can also result in fiercer competition across teams and an overall larger prize dissipation.

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