Optimal Ties in Contests
AbstractI analyze a mechanism design of a tournament in which the principal can strategically enhance the probability of a tie. The principal decides on a ”tie distance” and announces a rule according to which a tie is declared if the difference between the two contestants’ performances is within the tie distance. I show that the contestants’ equilibrium efforts do not depend on the prizes awarded in case of a tie. I find that there are cases in which the optimal mechanism has a positive tie distance.
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Bibliographic InfoPaper provided by The Center for the Study of Rationality, Hebrew University, Jerusalem in its series Discussion Paper Series with number dp430.
Length: 14 pages
Date of creation: Sep 2006
Date of revision:
Tournament; Strategic ties;
Other versions of this item:
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-10-07 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gershkov, Alex & Perry, Motty, 2006.
"Tournaments with Midterm Reviews,"
Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems
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