The beauty of "bigness" in contest design: merging or splitting?
AbstractThis paper studies in a multiple-winner contest setting how the total efforts may vary between a grand contest and a set of subcontests. We first show that the rent-dissipation rate increases when the numbers of contestants and prizes are "scaled up". In other words, the total efforts of a contest exhibit a striking "increasing return to scale" property: when the numbers of contestants and prizes scale up proportionally, the total efforts of the contest increase more than proportionally. Thus, the total efforts must increase when a set of identical subcontests are merged into a grand contest. Equivalently, the total efforts decrease when a grand contest is evenly divided. We further allow the grand contest to be split into uneven subcontests. We show that under a mild and plausible condition (regular contest technology), the grand contest generates more efforts as compared to any split contests.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 947.
Date of creation: Apr 2006
Date of revision:
Contests; Multiple-winners; Efforts; Size; Replication;
Find related papers by JEL classification:
- D7 - Microeconomics - - Analysis of Collective Decision-Making
- C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-12-01 (All new papers)
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