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When does division matter? Revisiting the optimal contest architecture

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  • Yildirim, Mustafa

Abstract

We compare the aggregate effort between centralized and decentralized contests. Employing a relatively general setting that admits the ratio-form and additive-noise contests as special cases, we identify the population size elasticity of marginal winning probability as a key determinant of this comparison.

Suggested Citation

  • Yildirim, Mustafa, 2023. "When does division matter? Revisiting the optimal contest architecture," Economics Letters, Elsevier, vol. 230(C).
    • Handle: RePEc:eee:ecolet:v:230:y:2023:i:c:s0165176523002586
    DOI: 10.1016/j.econlet.2023.111233
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    References listed on IDEAS

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    1. Inderst, Roman & Muller, Holger M. & Warneryd, Karl, 2007. "Distributional conflict in organizations," European Economic Review, Elsevier, vol. 51(2), pages 385-402, February.
    2. Fu, Qiang & Lu, Jingfeng, 2007. "Unifying Contests: from Noisy Ranking to Ratio-Form Contest Success Functions," MPRA Paper 6679, University Library of Munich, Germany.
    3. Warneryd, Karl, 2001. "Replicating contests," Economics Letters, Elsevier, vol. 71(3), pages 323-327, June.
    4. Fu, Qiang & Lu, Jingfeng, 2009. "The beauty of "bigness": On optimal design of multi-winner contests," Games and Economic Behavior, Elsevier, vol. 66(1), pages 146-161, May.
    5. Chowdhury, Subhasish M. & Kim, Sang-Hyun, 2017. "“Small, yet Beautiful”: Reconsidering the optimal design of multi-winner contests," Games and Economic Behavior, Elsevier, vol. 104(C), pages 486-493.
    6. Ryvkin, Dmitry & Drugov, Mikhail, 2020. "The shape of luck and competition in winner-take-all tournaments," Theoretical Economics, Econometric Society, vol. 15(4), November.
    7. Drugov, Mikhail & Ryvkin, Dmitry, 2020. "Tournament rewards and heavy tails," Journal of Economic Theory, Elsevier, vol. 190(C).
    Full references (including those not matched with items on IDEAS)

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    Keywords

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    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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