EconPapers    
Economics at your fingertips  
 

Gaining advantage by winning contests

Derek J. Clark (), Tore Nilssen () and Jan Yngve Sand ()
Additional contact information
Derek J. Clark: UiT - The Arctic University of Norway
Jan Yngve Sand: UiT - The Arctic University of Norway

Review of Economic Design, 2020, vol. 24, issue 1, No 2, 23-38

Abstract: Abstract We consider a principal who faces many identical competitors, and who can distribute a prize fund over two consecutive contests. The winner of contest one gains an advantage in contest two where his effort is more productive than all rivals. We identify a tipping point for the productivity parameter, below which it is optimal for an effort-maximizing principal to place the whole prize in the second contest. Above this level, a single symmetric contest is preferred. The institution chosen depends inextricably upon the number of competitors and their valuation of future gains and costs. We identify the optimal setting of the productivity parameter, showing that introducing asymmetry can increase total efforts by as much as one quarter compared to a single symmetric contest.

Keywords: Contest; Win advantage; Effort incentives; Budget division (search for similar items in EconPapers)
JEL-codes: D74 D72 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://link.springer.com/10.1007/s10058-020-00229-0 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:reecde:v:24:y:2020:i:1:d:10.1007_s10058-020-00229-0

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/10058

DOI: 10.1007/s10058-020-00229-0

Access Statistics for this article

Review of Economic Design is currently edited by Atila Abdulkadiroglu, Fuhito Kojima and Tilman Börgers

More articles in Review of Economic Design from Springer, Society for Economic Design
Bibliographic data for series maintained by Sonal Shukla ().

 
Page updated 2020-09-07
Handle: RePEc:spr:reecde:v:24:y:2020:i:1:d:10.1007_s10058-020-00229-0