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Contest divisioning

Author

Listed:
  • Philip Brookins

    (University of South Carolina)

  • Paan Jindapon

    (University of Alabama)

Abstract

In this paper, we ask a fundamental design question in the theory of contests: Should contestants and reward money be pooled into a single grand contest, or should they be divided into parallel subcontests? We theoretically explore optimal divisioning using Tullock’s lottery contest framework and compare the performance, i.e., total effort generated, of the grand contest to the performance of contest divisioning based on players’ ability or risk attitude. When all players are risk neutral, contest divisioning is never optimal. However, given that players are heterogeneous in either ability or risk attitude, we find that contest divisioning is optimal when the degrees of absolute risk aversion are sufficiently large. Importantly, our results support the widespread use of divisioning seen in practice.

Suggested Citation

  • Philip Brookins & Paan Jindapon, 2025. "Contest divisioning," Review of Economic Design, Springer;Society for Economic Design, vol. 29(3), pages 635-658, September.
    • Handle: RePEc:spr:reecde:v:29:y:2025:i:3:d:10.1007_s10058-022-00311-9
    DOI: 10.1007/s10058-022-00311-9
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    References listed 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
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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