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The Optimal Accuracy Level in Asymmetric Contests

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  • Wang Zhewei

    ()
    (University of Edinburgh)

Abstract

We interpret the discriminatory power, r, in the Power Contest Success Function (Tullock, 1980) as the contest designer's accuracy level. We look at the cases where two contestants are heterogeneous in ability and construct an equilibrium set for r > 0. We find that if the contestants are sufficiently different in ability, there always exists an optimal accuracy level for the contest designer. Additionally, as the difference in their abilities increases, the optimal accuracy level decreases.

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Bibliographic Info

Article provided by De Gruyter in its journal The B.E. Journal of Theoretical Economics.

Volume (Year): 10 (2010)
Issue (Month): 1 (April)
Pages: 1-18

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Handle: RePEc:bpj:bejtec:v:10:y:2010:i:1:n:13

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Cited by:
  1. Leonid Polishchuk & Alexander Tonis, 2013. "Endogenous contest success functions: a mechanism design approach," Economic Theory, Springer, vol. 52(1), pages 271-297, January.
  2. Christian Ewerhart, 2014. "Elastic contests and the robustness of the all-pay auctions," ECON - Working Papers 155, Department of Economics - University of Zurich.

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