Using a Simple Contest to Illustrate Mechanism Design
AbstractThis article describes a simple classroom activity that illustrates how economic theory can be used for mechanism design. The rules for a set of contests are presented; the results typically obtained from these contests illustrate how the prize structure can be manipulated in order to produce a particular outcome. Specifically, this activity is designed to show how changing the prize structure can impact both the contestants’ average efforts and the effort level of the hardest-working contestant. The activity can be run in a 50-minute class, has instructions that fit on a single piece of paper, and, although it can be run in large classes, requires only six students.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal The Journal of Economic Education.
Volume (Year): 42 (2011)
Issue (Month): 4 (October)
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