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Multiple‐Prize Contests – The Optimal Allocation Of Prizes

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  • Dana Sisak

Abstract

Multiple‐prize contests are important in various fields of economics ranging from rent seeking over labour economics, patent and R&D races to tendering for (governmental) projects. Hence it is crucial to understand the incentive effects of multiple prizes on effort investment. This survey attempts to outline, compare and evaluate the results from the literature. While a first prize always results in a positive incentive to invest effort, second and later prizes lead to ambiguous effects. Depending on the objective function, the characteristics of the individuals and the type of contest a different prize allocation is optimal.

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  • Dana Sisak, 2009. "Multiple‐Prize Contests – The Optimal Allocation Of Prizes," Journal of Economic Surveys, Wiley Blackwell, vol. 23(1), pages 82-114, February.
    • Handle: RePEc:bla:jecsur:v:23:y:2009:i:1:p:82-114
    DOI: 10.1111/j.1467-6419.2008.00557.x
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