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The Optimal Accuracy Level in Asymmetric Contests

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  • Wang Zhewei

    () (University of Edinburgh)

Abstract

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.

Suggested Citation

  • Wang Zhewei, 2010. "The Optimal Accuracy Level in Asymmetric Contests," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 10(1), pages 1-18, April.
  • Handle: RePEc:bpj:bejtec:v:10:y:2010:i:1:n:13
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    References listed on IDEAS

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    Cited by:

    1. Mustafa Yildirim, 2015. "Accuracy in contests: players’ perspective," Review of Economic Design, Springer;Society for Economic Design, vol. 19(1), pages 67-90, March.
    2. Ewerhart, Christian, 2017. "Revenue ranking of optimally biased contests: The case of two players," Economics Letters, Elsevier, vol. 157(C), pages 167-170.
    3. Qiang Fu & Qian Jiao & Jingfeng Lu, 2015. "Contests with endogenous entry," International Journal of Game Theory, Springer;Game Theory Society, vol. 44(2), pages 387-424, May.
    4. Christian Ewerhart, 2014. "Elastic contests and the robustness of the all-pay auctions," ECON - Working Papers 155, Department of Economics - University of Zurich.
    5. Qiang Fu & Jingfeng Lu & Yue Pan, 2015. "Team Contests with Multiple Pairwise Battles," American Economic Review, American Economic Association, vol. 105(7), pages 2120-2140, July.
    6. Ewerhart, Christian, 2017. "Contests with small noise and the robustness of the all-pay auction," Games and Economic Behavior, Elsevier, vol. 105(C), pages 195-211.
    7. Yosef Mealem & Shmuel Nitzan, 2013. "Direct and Structural Discrimination in Contests," CESifo Working Paper Series 4518, CESifo Group Munich.
    8. repec:eee:ecolet:v:159:y:2017:i:c:p:61-64 is not listed on IDEAS
    9. Leonid Polishchuk & Alexander Tonis, 2013. "Endogenous contest success functions: a mechanism design approach," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 52(1), pages 271-297, January.

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