Optimal rewards in contests

Chen Cohen, Todd Kaplan and Aner Sela

RAND Journal of Economics, 2008, vol. 39, issue 2, 434-451

Abstract: We study all‐pay contests with effort‐dependent rewards under incomplete information. A contestant's value to winning depends not only on his type but also on the effort‐dependent reward chosen by the designer. We analyze which reward is optimal for the designer when his objective is either total effort or highest effort. We find that under certain conditions the optimal reward may either be negative or even decreasing in effort; however, we find no advantage to having multiple rewards.

Date: 2008
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Citations: View citations in EconPapers (53)

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https://doi.org/10.1111/j.0741-6261.2008.00021.x

Related works:
Working Paper: The Optimal Rewards in Contests (2005)
Working Paper: Optimal Rewards in Contests (2004)
Working Paper: The Optimal Rewards in Contests (2004)
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