Optimal contest design under reverse-lottery technology
Jingfeng Lu (),
Bo Shen and
Zhewei Wang ()
Journal of Mathematical Economics, 2017, vol. 72, issue C, 25-35
In this paper, we study effort-maximizing contest design under the “reverse” nested lottery contest model of Fu et al. (2014) — which is the “mirror image” of the conventional nested lottery contest of Clark and Riis (1996). We show that under the reverse-lottery technology, a single-stage winner-take-all grand contest dominates all other feasible designs when the contest is sufficiently noisy. This result is in dramatic contrast to the conventional wisdom on the optimality of multistage elimination contests that is grounded under the conventional nested lottery contest technology in the literature. In the framework of a noisy-performance ranking model, the conventional and reverse models differ only in the noise on players’ performance. Our study therefore reveals the important role that the noise term plays in modeling imperfectly discriminatory contests.
Keywords: Reverse nested lottery contest; Multistage contest; Effort maximization; Optimal contest design (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:mateco:v:72:y:2017:i:c:p:25-35
Access Statistics for this article
Journal of Mathematical Economics is currently edited by Atsushi (A.) Kajii
More articles in Journal of Mathematical Economics from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().