A Mean Field Competition

Marcel Nutz and Yuchong Zhang

Papers from arXiv.org

Abstract: We introduce a mean field game with rank-based reward: competing agents optimize their effort to achieve a goal, are ranked according to their completion time, and paid a reward based on their relative rank. First, we propose a tractable Poissonian model in which we can describe the optimal effort for a given reward scheme. Second, we study the principal--agent problem of designing an optimal reward scheme. A surprising, explicit design is found to minimize the time until a given fraction of the population has reached the goal.

Date: 2017-08
New Economics Papers: this item is included in nep-exp and nep-gth
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