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Entry Into Winner-Take-All And Proportional-Prize Contests:An Experimental Study

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  • Timothy N. Cason
  • William A. Masters
  • Roman M. Sheremeta

Abstract

This experiment compares the performance of two contest designs: a standard winnertake- all tournament with a single fixed prize, and a novel proportional-payment design in which that same prize is divided among contestants by their share of total achievement. We find that proportional prizes elicit more entry and more total achievement than the winner-take-all tournament. The proportional-prize contest performs better by limiting the degree to which heterogeneity among contestants discourages weaker entrants, without altering the performance of stronger entrants. These findings could inform the design of contests for technological and other improvements, which are widely used by governments and philanthropic donors to elicit more effort on targeted economic and technological development activities.

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Bibliographic Info

Paper provided by Purdue University, Department of Economics in its series Purdue University Economics Working Papers with number 1231.

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Length: 34
Date of creation: Apr 2010
Date of revision:
Handle: RePEc:pur:prukra:1231

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Keywords: performance pay; tournament; piece rate; tournament design; contest; experiments; risk aversion; feedback; gender;

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References

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Citations

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Cited by:
  1. Francesco Fallucchi & Elke Renner & Martin Sefton, 2013. "Information feedback and contest structure in rent-seeking games," Discussion Papers 2013-02, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  2. Nagore Iriberri & Pedro Rey-Biel, 2011. "Let's (not) talk about sex: The effect of information provision on gender differences in performance under competition," Economics Working Papers 1288, Department of Economics and Business, Universitat Pompeu Fabra.
  3. Jordi Brandts & Valeska Groenert & Christina Rott, 2012. "The Impact of Advice on Women's and Men's Selection into Competition," Working Papers 663, Barcelona Graduate School of Economics.
  4. Marco Faravelli & Luca Stanca, 2010. "When Less is More: Rationing and Rent Dissipation in Stochastic Contests," Working Papers 197, University of Milano-Bicocca, Department of Economics, revised Sep 2010.
  5. Glenn Dutcher, 2011. "How does the social distance between an employee and a manager affect employee competition for a reward?," Working Papers 2011-29, Faculty of Economics and Statistics, University of Innsbruck.
  6. Roman M. Sheremeta, 2013. "Overbidding and Heterogeneous Behavior in Contest Experiments," Working Papers 13-06, Chapman University, Economic Science Institute.
  7. Jeffrey A. Flory & Andreas Leibbrandt & John A. List, 2010. "Do Competitive Work Places Deter Female Workers? A Large-Scale Natural Field Experiment on Gender Differences in Job-Entry Decisions," NBER Working Papers 16546, National Bureau of Economic Research, Inc.
  8. Curtis R. Price & Roman M. Sheremeta, 2012. "Endowment Origin, Demographic Effects and Individual Preferences in Contests," Working Papers 12-07, Chapman University, Economic Science Institute.
  9. Shakun D. Mago & Roman M. Sheremeta & Andrew Yates, 2012. "Best-of-Three Contest Experiments: Strategic versus Psychological Momentum," Working Papers 12-30, Chapman University, Economic Science Institute.
  10. Matthias Sutter & Daniela R?tzler, 2010. "Gender differences in competition emerge early in life," Working Papers 2010-14, Faculty of Economics and Statistics, University of Innsbruck.
  11. Loukas Balafoutas & Glenn Dutcher & Florian Lindner & Dmitry Ryvkin, 2012. "The optimal allocation of prizes in tournaments of heterogeneous agents," Working Papers 2012-08, Faculty of Economics and Statistics, University of Innsbruck.
  12. Jordi Brandts & Valeska Groener & Christina Rott, 2012. "The impact of advice on women's and men's selection into competition," UFAE and IAE Working Papers 912.12, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  13. E. Glenn Dutcher & Loukas Balafoutas & Florian Lindner & Dmitry Ryvkin & Matthias Sutter, 2013. "Strive to be first or avoid being last: An experiment on relative performance incentives," Working Papers 2013-08, Faculty of Economics and Statistics, University of Innsbruck.
  14. Sheremeta, Roman M. & Wu, Steven Y., 2012. "Testing Canonical Tournament Theory: On the Impact of Risk, Social Preferences and Utility Structure," IZA Discussion Papers 6304, Institute for the Study of Labor (IZA).
  15. Roman M. Sheremeta & William A. Masters & Timothy N. Cason, 2012. "Winner-Take-All and Proportional-Prize Contests: Theory and Experimental Results," Working Papers 12-04, Chapman University, Economic Science Institute.

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