Please use this identifier to cite or link to this item:
|Title:||The optimal multi-stage contest|
|Authors:||Fu, Q. |
|Citation:||Fu, Q., Lu, J. (2012). The optimal multi-stage contest. Economic Theory 51 (2) : 351-382. ScholarBank@NUS Repository. https://doi.org/10.1007/s00199-009-0463-z|
|Abstract:||This paper investigates the optimal (effort-maximizing) structure of multi-stage sequential-elimination contests. We allow the contest organizer to design the contest structure using two instruments: contest sequence (the number of stages, and the number of contestants remaining after each stage), and prize allocation. When the contest technology is sufficiently noisy, we find that multi-stage contests elicit more effort than single-stage contests. For concave and moderately convex impact functions, the contest organizer should allocate the entire prize purse to a single final prize, regardless of the contest sequence. Additional stages always increase total effort. Therefore, the optimal contest eliminates one contestant at each stage until the finale when a single winner obtains the entire prize purse. Our results thus rationalize various forms of multi-stage contests that are conducted in the real world. © 2009 Springer-Verlag.|
|Source Title:||Economic Theory|
|Appears in Collections:||Staff Publications|
Show full item record
Files in This Item:
There are no files associated with this item.
checked on May 17, 2018
WEB OF SCIENCETM
checked on May 9, 2018
checked on Mar 11, 2018
Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.