Endogenous association in contests with inequality effects of status

A population of agents is stratiÖed in a two-layer status hierarchy, and they form couples to participate in contests to win a prize (of recognition). Partners in a couple can have equal or di§erent status, they compete together against all the other couples, and possibly also between them to appropriate the prize. Status di§erences generate inequalities due to an external bias in evaluation of the contestants ñ the Matthew e§ect ñ and to a bias internal to the couple due to the asymmetry of power when dividing the prize ñ the power e§ect. We relate agentsíequilibrium investments to win the contest and their e§orts to appropriate the prize to the number of contestants and to the distribution of status among them, further revealing the endogenous formation of homophilous and heterophilous associations. Our analysis reveals that the di§erences in status are only reáected in the agentsístrategic behavior and not in the outcome of the contest (among the couples) and in the allocation of the prize (within the couple). Moreover, the status homophily principle holds true only in small populations where status is concentrated among few agents.