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Optimally biased contests with draws

Author

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  • Li, Bo
  • Wu, Zenan
  • Xing, Zeyu

Abstract

We investigate the optimal design of a generalized lottery contest that incorporates the possibility of draws. The designer can impose identity-dependent treatments – i.e., multiplicative biases and additive headstarts – and/or introduce the possibility of draws. For a general objective function, the designer does not allow for draws in the optimal contest.

Suggested Citation

  • Li, Bo & Wu, Zenan & Xing, Zeyu, 2023. "Optimally biased contests with draws," Economics Letters, Elsevier, vol. 226(C).
    • Handle: RePEc:eee:ecolet:v:226:y:2023:i:c:s0165176523001015
    DOI: 10.1016/j.econlet.2023.111076
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    Cited by:

    1. Goel, Sumit & Goyal, Amit, 2023. "Optimal tie-breaking rules," Journal of Mathematical Economics, Elsevier, vol. 108(C).
    2. Franke, Jörg & Metzger, Lars P., 2023. "Repeated Contests with Draws," Ruhr Economic Papers 1016, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.

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    More about this item

    Keywords

    Contest; Draws; Biases; Headstarts; Contest design;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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