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Optimal Price Of Entry Into A Competition

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  • Boris Ginzburg

Abstract

A continuum of contestants are choosing whether to enter a competition. Each contestant has a type, and of those who enter, the ones with highest types receive prizes. A profit‐maximizing firm controls entry, and charges a price for it. I show that an increase in the value of each prize leads the firm to raise the price while keeping the intensity of entry fixed. Conversely, when the mass of prizes increases, the firm initially keeps the price constant while allowing entry to increase; and later—raises the price. (JEL C72, D82, D83)

Suggested Citation

  • Boris Ginzburg, 2021. "Optimal Price Of Entry Into A Competition," Economic Inquiry, Western Economic Association International, vol. 59(1), pages 280-286, January.
    • Handle: RePEc:bla:ecinqu:v:59:y:2021:i:1:p:280-286
    DOI: 10.1111/ecin.12956
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    References listed on IDEAS

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    Cited by:

    1. Ginzburg, Boris, 2019. "A Simple Model of Competitive Testing," MPRA Paper 99463, University Library of Munich, Germany.
    2. Mark Whitmeyer, 2021. "Submission Fees in Risk-Taking Contests," Papers 2108.13506, arXiv.org.

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    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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