Competitive problem solving and the optimal prize schemes

Toru Suzuki

Games and Economic Behavior, 2012, vol. 75, issue 2, 1009-1013

Abstract: Agents compete to solve a problem. Each agent simultaneously chooses either a safe method or a risky method to solve the problem. This paper analyzes a prize scheme as an incentive to induce the optimal risk-taking level which maximizes the designerʼs interest. It is shown that whenever the winner-take-all scheme induces excessive risk-taking, there exists a prize scheme which induces the optimal risk-taking. Moreover, the existence of such a prize scheme is guaranteed if the number of competitors is sufficiently large.

Keywords: Optimal prize scheme; Risk taking; Experimentation; Problem solving (search for similar items in EconPapers)
JEL-codes: D82 D83 O32 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Competitive Problem Solving and the Optimal Prize Schemes (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:75:y:2012:i:2:p:1009-1013

DOI: 10.1016/j.geb.2012.02.016

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