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Effective contests

Author

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  • Kaplan, Todd R.
  • Sela, Aner

Abstract

We find that two-stage contests could be ineffective, namely, there is a higher chance of low-ability players participating (and winning) than high-ability players. However, imposing a fee on the winner can guarantee that the contest will be effective.

Suggested Citation

  • Kaplan, Todd R. & Sela, Aner, 2010. "Effective contests," Economics Letters, Elsevier, vol. 106(1), pages 38-41, January.
    • Handle: RePEc:eee:ecolet:v:106:y:2010:i:1:p:38-41
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    References listed on IDEAS

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    1. Benny Moldovanu & Aner Sela, 2001. "The Optimal Allocation of Prizes in Contests," American Economic Review, American Economic Association, vol. 91(3), pages 542-558, June.
    2. Dan Kovenock & Michael R. Baye & Casper G. de Vries, 1996. "The all-pay auction with complete information (*)," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 8(2), pages 291-305.
    3. Moldovanu, Benny & Sela, Aner, 2006. "Contest architecture," Journal of Economic Theory, Elsevier, vol. 126(1), pages 70-96, January.
    4. Kaplan, Todd R. & Luski, Israel & Wettstein, David, 2003. "Innovative activity and sunk cost," International Journal of Industrial Organization, Elsevier, vol. 21(8), pages 1111-1133, October.
    5. Che, Yeon-Koo & Gale, Ian L, 1998. "Caps on Political Lobbying," American Economic Review, American Economic Association, vol. 88(3), pages 643-651, June.
    6. Arye L. Hillman & John G. Riley, 1989. "Politically Contestable Rents And Transfers," Economics and Politics, Wiley Blackwell, vol. 1(1), pages 17-39, March.
    7. Amann, Erwin & Leininger, Wolfgang, 1996. "Asymmetric All-Pay Auctions with Incomplete Information: The Two-Player Case," Games and Economic Behavior, Elsevier, vol. 14(1), pages 1-18, May.
    8. Krishna, Vijay & Morgan, John, 1997. "An Analysis of the War of Attrition and the All-Pay Auction," Journal of Economic Theory, Elsevier, vol. 72(2), pages 343-362, February.
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    Citations

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    Cited by:

    1. Boris Ginzburg, 2021. "Optimal Price Of Entry Into A Competition," Economic Inquiry, Western Economic Association International, vol. 59(1), pages 280-286, January.
    2. Thomas, Jonathan P. & Wang, Zhewei, 2013. "Optimal punishment in contests with endogenous entry," Journal of Economic Behavior & Organization, Elsevier, vol. 91(C), pages 34-50.
    3. Mattozzi, Andrea & Merlo, Antonio, 2015. "Mediocracy," Journal of Public Economics, Elsevier, vol. 130(C), pages 32-44.
    4. Luke Boosey & Philip Brookins & Dmitry Ryvkin, 2020. "Entry in group contests," Working Papers wp2020_02_01, Department of Economics, Florida State University.
    5. Liu, Bin & Lu, Jingfeng, 2019. "The optimal allocation of prizes in contests with costly entry," International Journal of Industrial Organization, Elsevier, vol. 66(C), pages 137-161.

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