Using a Simple Contest to Illustrate Mechanism Design

Calvin Blackwell

The Journal of Economic Education, 2011, vol. 42, issue 4, 375-387

Abstract: This article describes a simple classroom activity that illustrates how economic theory can be used for mechanism design. The rules for a set of contests are presented; the results typically obtained from these contests illustrate how the prize structure can be manipulated in order to produce a particular outcome. Specifically, this activity is designed to show how changing the prize structure can impact both the contestants’ average efforts and the effort level of the hardest-working contestant. The activity can be run in a 50-minute class, has instructions that fit on a single piece of paper, and, although it can be run in large classes, requires only six students.

Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:taf:jeduce:v:42:y:2011:i:4:p:375-387

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DOI: 10.1080/00220485.2011.606088

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