Optimal Contest Design: A General Approach
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BORIS DOI
Description
We consider the design of contests for n agents when the principal can choose both the prize profile and the contest success function. Our framework includes Tullock contests, Lazear-Rosen tournaments and all-pay contests as special cases, among others. We show that the optimal contest has an intermediate degree of competitiveness in the contest success function, and a minimally competitive prize profile with n−1 identical prizes. The optimum can be achieved with a nested Tullock contest. We extend the model to allow for imperfect performance measurement and
for heterogeneous agents. We relate our results to a recent literature which has asked similar questions but has typically focused on the design of either the prize profile or the contest success function
for heterogeneous agents. We relate our results to a recent literature which has asked similar questions but has typically focused on the design of either the prize profile or the contest success function
Date of Publication
2020-05
Publication Type
Working Paper
Language(s)
en
Contributor(s)
Liu, Shuo | |
Netzer, Nick |
Additional Credits
Publisher
Departement of Economics
Access(Rights)
open.access