In this article, I analyze the effects of future liquidity constraints on the investment behavior of two contestants with asymmetric prize valuations in a dynamic contest model. Contestants compete in two consecutive Tullock contests in order to win a contest prize in each period. The loser of...

We analyze the effects of future liquidity constraints on contestants' investment in a dynamic contest model. Contestants invest in two consecutive contests to win a prize in each period. The loser of the first-period contest can be liquidity-constrained in the second period due to too little...