The Optimal Rewards in Contests

Chen Cohen, Todd Kaplan and Aner Sela
Additional contact information
Chen Cohen: Department of Economics, Ben-Gurion University of the Negev, Israel.

No 402, Discussion Papers from University of Exeter, Department of Economics

Abstract: We study all-pay contests under incomplete information where the reward is a function of the contestant's type and also of his effort. We analyze the optimal reward for the designer when the reward is either multiplicatively separable or additively separable in effort and type. In the multiplicatively separable environment the optimal reward is always positive while in the additively separable environment it may also be negative. In both environments, depending on the designer's utility, the optimal reward may either increase or decrease in the contestants' effort. Finally, in both environments, the designer's payoff depends only upon the expected value of the effort-dependent rewards and not the number of rewards.

Keywords: Contests; All-Pay Auctions; Optimal Design. (search for similar items in EconPapers)
JEL-codes: D44 D72 O31 (search for similar items in EconPapers)
Date: 2004-10
References: Add references at CitEc
Citations: View citations in EconPapers (2)

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https://exetereconomics.github.io/RePEc/dpapers/DP0402.pdf (application/pdf)

Related works:
Journal Article: Optimal rewards in contests (2008)
Working Paper: The Optimal Rewards in Contests (2005)
Working Paper: Optimal Rewards in Contests (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:exe:wpaper:0402

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