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 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)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) 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.
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:spr:reecde:v:24:y:2020:i:1:d:10.1007_s10058-020-00229-0
Ordering information: This journal article can be ordered from
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 () and Springer Nature Abstracting and Indexing ().