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The Optimal Accuracy Level in Asymmetric Contests

Listed author(s):
  • Wang Zhewei

    ()

    (University of Edinburgh)

We interpret the discriminatory power, r, in the Power Contest Success Function (Tullock, 1980) as the contest designer's accuracy level. We look at the cases where two contestants are heterogeneous in ability and construct an equilibrium set for r > 0. We find that if the contestants are sufficiently different in ability, there always exists an optimal accuracy level for the contest designer. Additionally, as the difference in their abilities increases, the optimal accuracy level decreases.

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Article provided by De Gruyter in its journal The B.E. Journal of Theoretical Economics.

Volume (Year): 10 (2010)
Issue (Month): 1 (April)
Pages: 1-18

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Handle: RePEc:bpj:bejtec:v:10:y:2010:i:1:n:13
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  1. Baye, M.R. & Kovenock, D. & De Vries, C.G., 1993. "The Solution to the Tullock Rent-Seeking Game when R > 2: Mixed Strategy Equilibria and Mean Dissipation Rates," Papers 10-93-9, Pennsylvania State - Department of Economics.
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