Contest divisioning

Philip Brookins () and Paan Jindapon ()
Additional contact information
Philip Brookins: University of South Carolina
Paan Jindapon: University of Alabama

Review of Economic Design, 2025, vol. 29, issue 3, No 10, 635-658

Abstract: Abstract In this paper, we ask a fundamental design question in the theory of contests: Should contestants and reward money be pooled into a single grand contest, or should they be divided into parallel subcontests? We theoretically explore optimal divisioning using Tullock’s lottery contest framework and compare the performance, i.e., total effort generated, of the grand contest to the performance of contest divisioning based on players’ ability or risk attitude. When all players are risk neutral, contest divisioning is never optimal. However, given that players are heterogeneous in either ability or risk attitude, we find that contest divisioning is optimal when the degrees of absolute risk aversion are sufficiently large. Importantly, our results support the widespread use of divisioning seen in practice.

Keywords: Contest design; Divisioning; Cost heterogeneity; Risk attitude heterogeneity (search for similar items in EconPapers)
JEL-codes: C72 D72 D81 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10058-022-00311-9 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:29:y:2025:i:3:d:10.1007_s10058-022-00311-9

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

DOI: 10.1007/s10058-022-00311-9

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 ().