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Economic Contests with Incomplete Information and Optimal Contest Design

Author

Listed:
  • Nirvikar Singh

    (Merrill College, University of California, Santa Cruz, California 95064)

  • Donald Wittman

    (Merrill College, University of California, Santa Cruz, California 95064)

Abstract

This paper analyzes contests where contestants have private information about their abilities, and these abilities may be correlated. It differs from previous work chiefly in that it allows for such imperfect correlation, and that it restricts attention to a discrete output space. The latter aspect enables a complete characterization of possible equilibria. The analysis draws special attention to the possibility that equilibrium may involve lower ability contestants choosing higher effort and winning the contest. It is demonstrated that it may be optimal for the contest designer to induce such equilibria, and some conditions for this are derived. Different possible objectives of the contest designer are also discussed.

Suggested Citation

  • Nirvikar Singh & Donald Wittman, 1988. "Economic Contests with Incomplete Information and Optimal Contest Design," Management Science, INFORMS, vol. 34(4), pages 528-540, April.
    • Handle: RePEc:inm:ormnsc:v:34:y:1988:i:4:p:528-540
    DOI: 10.1287/mnsc.34.4.528
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    Citations

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    Cited by:

    1. Christian Ewerhart & Federico Quartieri, 2020. "Unique equilibrium in contests with incomplete information," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 70(1), pages 243-271, July.
    2. Marco Runkel, 2003. "Optimal Contest Design when the Designer’s Payoff Depends on Competitive Balance," CESifo Working Paper Series 1009, CESifo.
    3. Brendan Daley & Ruoyu Wang, 2018. "When to Release Feedback in a Dynamic Tournament," Decision Analysis, INFORMS, vol. 15(1), pages 11-26, March.

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