The optimal prize structure of symmetric Tullock contests

Paul Schweinzer and Ella Segev

Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems from Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich

Abstract: We show that the optimal prize structure of symmetric n-player Tullock tournaments assigns the entire prize pool to the winner, provided that a symmetric pure strategy equilibrium exists. If such an equilibrium fails to exist under the winner-take-all structure, we construct the optimal prize structure which improves existence conditions by dampening efforts. If no such optimal equilibrium exists, no symmetric pure strategy equilibrium induces positive efforts.

Keywords: Tournaments; Incentive structures; Rent seeking (search for similar items in EconPapers)
JEL-codes: C7 D72 J31 (search for similar items in EconPapers)
Date: 2008-11
New Economics Papers: this item is included in nep-cdm
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Citations: View citations in EconPapers (11)

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Related works:
Journal Article: The optimal prize structure of symmetric Tullock contests (2012)
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