Letina, Igor; Liu, Shuo; Netzer, Nick (2023). Optimal contest design: Tuning the heat. Journal of economic theory, 213, p. 105616. Elsevier 10.1016/j.jet.2023.105616
|
Text
1-s2.0-S0022053123000121-main.pdf - Published Version Available under License Creative Commons: Attribution (CC-BY). Download (751kB) | Preview |
We consider the design of contests when the principal can choose both the prize profile and how the prizes are allocated as a function of a possibly noisy signal about the agents' efforts. We provide sufficient conditions that guarantee optimality of a contest. Optimal contests have a minimally competitive prize profile and an intermediate degree of competitiveness in the contest success function. Whenever observation is not too noisy, the optimum can be achieved by an all-pay contest with a cap. When observation is perfect, the optimum can also be achieved by a nested Tullock contest. 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.
Item Type: |
Journal Article (Original Article) |
|---|---|
Division/Institute: |
03 Faculty of Business, Economics and Social Sciences > Department of Economics |
UniBE Contributor: |
Letina, Igor |
Subjects: |
300 Social sciences, sociology & anthropology > 330 Economics |
ISSN: |
0022-0531 |
Publisher: |
Elsevier |
Language: |
English |
Submitter: |
Julia Alexandra Schlosser |
Date Deposited: |
23 Oct 2023 08:28 |
Last Modified: |
29 Oct 2023 02:26 |
Publisher DOI: |
10.1016/j.jet.2023.105616 |
BORIS DOI: |
10.48350/187339 |
URI: |
https://boris.unibe.ch/id/eprint/187339 |
Actions (login required)
 |
Edit item |