The optimal allocation of prizes in two-stage contests

Shahar Alshech and Aner Sela

Economics Letters, 2021, vol. 203, issue C

Abstract: We study two-stage contests in which the designer can award a prize for winning in each stage, and also a prize for winning in both stages. For this purpose, we analyze the optimal allocation of prizes for a designer who wishes to maximize the players’ total effort when the matches in each stage are modeled as Tullock contests. It is demonstrated that the prize for winning in both stages should be allocated in the two-stage Tullock contest with two players, but not when there are more than two players.

Keywords: Two-stage contests; Tullock contests; Best-of-two contests (search for similar items in EconPapers)
JEL-codes: D44 O31 O32 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:203:y:2021:i:c:s0165176521001270

DOI: 10.1016/j.econlet.2021.109850

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