Screening Signal-Manipulating Agents via Contests
Yingkai Li and
Xiaoyun Qiu
Papers from arXiv.org
Abstract:
We study the design of screening mechanisms subject to competition and manipulation. A social planner has limited resources to allocate to multiple agents using only signals manipulable through unproductive effort. We show that the welfare-maximizing mechanism takes the form of a contest and characterize the optimal contest. We apply our results to two settings: either the planner has one item or a number of items proportional to the number of agents. We show that in both settings, with sufficiently many agents, a winner-takes-all contest is never optimal. In particular, the planner always benefits from randomizing the allocation to some agents.
Date: 2023-02, Revised 2024-02
New Economics Papers: this item is included in nep-des, nep-gth and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2302.09168
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