Header

UZH-Logo

Maintenance Infos

Optimal contest design: a general approach


Letina, Igor; Liu, Shuo; Netzer, Nick (2020). Optimal contest design: a general approach. Discussion Papers 20-11, Department of Economics, University of Bern.

Abstract

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.

Abstract

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.

Statistics

Downloads

3 downloads since deposited on 15 Feb 2021
3 downloads since 12 months
Detailed statistics

Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
JEL Classification:D02, D82, M52
Uncontrolled Keywords:Contest design, optimal contests, tournaments
Language:English
Date:May 2020
Deposited On:15 Feb 2021 15:43
Last Modified:15 Feb 2021 15:46
Series Name:Discussion Papers
Number of Pages:44
OA Status:Green
Official URL:https://boris.unibe.ch/id/eprint/150266

Download

Green Open Access

Download PDF  'Optimal contest design: a general approach'.
Preview
Content: Published Version
Language: English
Filetype: PDF
Size: 628kB