Incentive effects of second prizes

Stefan Szymanski and Tommaso M. Valletti ()
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Stefan Szymanski: Imperial College London
Tommaso M. Valletti: Imperial College London

A chapter in 40 Years of Research on Rent Seeking 1, 2004, pp 633-647 from Springer

Abstract: Abstract Most of the contest literature deals with first prizes; this paper deals with the optimality of second prizes. We show that, in a three-person contest where one contestant is very strong, a second prize can be optimal from the point of view of eliciting maximum effort from every contestant. We also consider the desirability of second prizes from the point of view of competitive balance, which matters for contests such as sports competitions.

Keywords: Imperfectly discriminating contests; Prizes; Logit contests; Rent-seeking (search for similar items in EconPapers)
JEL-codes: D43 L13 (search for similar items in EconPapers)
Date: 2004
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-540-79182-9_46

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DOI: 10.1007/978-3-540-79182-9_46

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