Choosing the Prize in Contests

Nicolas de Roos, Alexander Matros, Vladimir Smirnov and Zehra Valencia

No 2022-04, Working Papers from University of Sydney, School of Economics

Abstract: In many contests, a participant’s choices can influence the value of the prize on offer. However, in the standard contest model, the value of the prize is exogenous and participants have discretion only over the effort they exert. This paper proposes a new type of N-player contest in which each participant chooses both her own prize and effort. We present a general model and establish sufficient conditions for equilibrium existence. We then describe sufficient conditions for the existence of symmetric equilibria, and discuss comparative statics with respect to the number of players. Finally, we discuss asymmetric contests.

Date: 2022-09
New Economics Papers: this item is included in nep-mic
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