Contest with pre-contest investment

Qiang Fu and Jingfeng Lu

Economics Letters, 2009, vol. 103, issue 3, 142-145

Abstract: In a standard noisy contest, more competition (more contestants) leads to lower individual equilibrium effort. We show that when contestants can make pre-contest investment to enhance their competency, neither equilibrium investment nor individual effort is monotonic in the number of contestants. Individual effort may increase with the level of participation.

Keywords: Contest; Pre-contest; investment; Preemptive; incentive; Shortlisting; Effort; supply (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (10)

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