Contests with endogenous discrimination
AbstractThis paper builds a complete information contest model with endogenous discrimination. We show that a revenue-maximizing contest designer will optimally set a bias towards a weaker contestant against a stronger contestant and completely eliminate the asymmetry between the two. Moreover, in contrast to fair contest models, where the revenue-maximizing contest designer is better off if the weaker contestant becomes stronger or the stronger contestant becomes weaker, our model shows that the opposite result may arise.
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Bibliographic InfoArticle provided by Elsevier in its journal Economics Letters.
Volume (Year): 117 (2012)
Issue (Month): 3 ()
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Web page: http://www.elsevier.com/locate/ecolet
All pay auction; Endogenous discrimination; Contests;
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