IDEAS home Printed from https://ideas.repec.org/a/eee/gamebe/v66y2009i1p146-161.html
   My bibliography  Save this article

The beauty of "bigness": On optimal design of multi-winner contests

Author

Listed:
  • Fu, Qiang
  • Lu, Jingfeng

Abstract

This paper examines the variation in total effort expended by participants when prizes are awarded in a grand contest as opposed to a number of subcontests. When contestants are homogeneous, under a mild and plausible condition (regular contest technology), a grand contest generates more effort than any set of subcontests. When no restrictions are placed on the contest technology, the results further demonstrate an "increasing-return-to-scale" property such that each individual responds to a proportional increase in the number of contestants and the number of each prize by increasing individual effort. Therefore, when a collection of identical subcontests forms a grand contest, the total effort always increases and the grand contest leads to a higher rent-dissipation rate. Our results apply to a wide variety of competitive activities, such as high-profile sports (e.g., diving and gymnastics in the Olympic Games), the internal labor market and the "quota" system for public resource allocation.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:gamebe:v:66:y:2009:i:1:p:146-161
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0899-8256(08)00116-4
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    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. Barut, Yasar & Kovenock, Dan, 1998. "The symmetric multiple prize all-pay auction with complete information," European Journal of Political Economy, Elsevier, vol. 14(4), pages 627-644, November.
    3. Clark, Derek J & Riis, Christian, 1996. "A Multi-winner Nested Rent-Seeking Contest," Public Choice, Springer, vol. 87(1-2), pages 177-184, April.
    4. Clark, Derek J. & Riis, Christian, 1998. "Influence and the discretionary allocation of several prizes," European Journal of Political Economy, Elsevier, vol. 14(4), pages 605-625, November.
    5. Moldovanu, Benny & Sela, Aner, 2006. "Contest architecture," Journal of Economic Theory, Elsevier, vol. 126(1), pages 70-96, January.
    6. Gradstein, Mark, 1998. "Optimal contest design: volume and timing of rent seeking in contests," European Journal of Political Economy, Elsevier, vol. 14(4), pages 575-585, November.
    7. Benny Moldovanu & Aner Sela & Xianwen Shi, 2007. "Contests for Status," Journal of Political Economy, University of Chicago Press, vol. 115, pages 338-363.
    8. Clark, Derek J & Riis, Christian, 1998. "Competition over More Than One Prize," American Economic Review, American Economic Association, vol. 88(1), pages 276-289, March.
    9. Roman Inderst & Holger Müller & Karl Wärneryd, 2005. "Influence costs and hierarchy," Economics of Governance, Springer, vol. 6(2), pages 177-197, July.
    10. Amegashie, J Atsu, 2000. "Some Results on Rent-Seeking Contests with Shortlisting," Public Choice, Springer, vol. 105(3-4), pages 245-253, December.
    11. Fu, Qiang & Lu, Jingfeng, 2007. "Unifying Contests: from Noisy Ranking to Ratio-Form Contest Success Functions," MPRA Paper 6679, University Library of Munich, Germany.
    12. Szymanski, Stefan & Valletti, Tommaso M., 2005. "Incentive effects of second prizes," European Journal of Political Economy, Elsevier, vol. 21(2), pages 467-481, June.
    13. Glazer, Amihai & Hassin, Refael, 1988. "Optimal Contests," Economic Inquiry, Western Economic Association International, vol. 26(1), pages 133-143, January.
    14. Stergios Skaperdas, 1996. "Contest success functions (*)," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 7(2), pages 283-290.
    15. McFadden, Daniel, 1974. "The measurement of urban travel demand," Journal of Public Economics, Elsevier, vol. 3(4), pages 303-328, November.
    16. Yates, Andrew J. & Heckelman, Jac C., 2001. "Rent-setting in multiple winner rent-seeking contests," European Journal of Political Economy, Elsevier, vol. 17(4), pages 835-852, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Paul Schweinzer & Ella Segev, 2012. "The optimal prize structure of symmetric Tullock contests," Public Choice, Springer, vol. 153(1), pages 69-82, October.
    2. Emmanuel Dechenaux & Dan Kovenock & Roman Sheremeta, 2015. "A survey of experimental research on contests, all-pay auctions and tournaments," Experimental Economics, Springer;Economic Science Association, vol. 18(4), pages 609-669, December.
    3. Vesperoni, Alberto, 2013. "A contest success function for rankings," NEPS Working Papers 8/2013, Network of European Peace Scientists.
    4. Konrad, Kai A. & Kovenock, Dan, 2012. "The lifeboat problem," European Economic Review, Elsevier, vol. 56(3), pages 552-559.
    5. Loukas Balafoutas & E. Glenn Dutcher & Florian Lindner & Dmitry Ryvkin, 2017. "The Optimal Allocation Of Prizes In Tournaments Of Heterogeneous Agents," Economic Inquiry, Western Economic Association International, vol. 55(1), pages 461-478, January.
    6. Lu, Jingfeng & Wang, Zhewei, 2015. "Axiomatizing multi-prize nested lottery contests: A complete and strict ranking perspective," Journal of Economic Behavior & Organization, Elsevier, vol. 116(C), pages 127-141.
    7. Jingfeng Lu & Zhewei Wang, 2016. "Axiomatization of reverse nested lottery contests," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 47(4), pages 939-957, December.
    8. Shupp, Robert & Sheremeta, Roman M. & Schmidt, David & Walker, James, 2013. "Resource allocation contests: Experimental evidence," Journal of Economic Psychology, Elsevier, pages 257-267.
    9. Connolly Robert A. & Rendleman Richard J., 2011. "Going for the Green: A Simulation Study of Qualifying Success Probabilities in Professional Golf," Journal of Quantitative Analysis in Sports, De Gruyter, vol. 7(4), pages 1-50, October.
    10. 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.
    11. repec:eee:mateco:v:72:y:2017:i:c:p:25-35 is not listed on IDEAS
    12. Subhasish M. Chowdhury & Sang-Hyun Kim, 2016. "¡°Small, yet Beautiful": Reconsidering the Optimal Design of Multi-winner Contests," Working papers 2016rwp-98, Yonsei University, Yonsei Economics Research Institute.
    13. Hirata, Daisuke, 2014. "A model of a two-stage all-pay auction," Mathematical Social Sciences, Elsevier, vol. 68(C), pages 5-13.
    14. Dahm, Matthias & Esteve, Patrícia,, 2013. "Affirmative Action through Extra Prizes," Working Papers 2072/222197, Universitat Rovira i Virgili, Department of Economics.
    15. Sheremeta, Roman, 2009. "Essays on Experimental Investigation of Lottery Contests," MPRA Paper 49888, University Library of Munich, Germany.
    16. Fu, Qiang & Lu, Jingfeng & Wang, Zhewei, 2014. "“Reverse” nested lottery contests," Journal of Mathematical Economics, Elsevier, vol. 50(C), pages 128-140.
    17. Alberto Vesperoni, 2016. "A contest success function for rankings," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 47(4), pages 905-937, December.
    18. Liu, Xuyuan & Lu, Jingfeng, 2014. "The effort-maximizing contest with heterogeneous prizes," Economics Letters, Elsevier, vol. 125(3), pages 422-425.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:gamebe:v:66:y:2009:i:1:p:146-161. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/inca/622836 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.