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Dividing the Spoils: Strategic Prize Allocation in Team Contests

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  • Zhonghong Kuang
  • Jingfeng Lu
  • Yiyao Zhu

Abstract

Rival teams compete through battles and reward members only after team victory. We study how team managers allocate victory-contingent reward budgets across players to maximize their teams' winning probabilities in a majoritarian contest. Under a regularity condition on battle technologies, the allocation game has a unique pure-strategy equilibrium. Despite differences in budgets and player costs across teams and technologies across battles, both managers choose the same normalized reward schedule, a property we call reward schedule alignment. Each battle's share is proportional to discriminatory power, closeness, and pivotality. With precommitted rewards, allocations and team-winning probabilities are independent of battle order.

Suggested Citation

  • Zhonghong Kuang & Jingfeng Lu & Yiyao Zhu, 2026. "Dividing the Spoils: Strategic Prize Allocation in Team Contests," Papers 2605.25349, arXiv.org, revised Jul 2026.
    • Handle: RePEc:arx:papers:2605.25349
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    References listed on IDEAS

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    1. Ma, Xiangjun & McLaren, John & Chalak, Karim, 2026. "A swing-state theorem, with evidence," Journal of International Economics, Elsevier, vol. 159(C).
    2. Feng, Xin & Lu, Jingfeng, 2018. "How to split the pie: Optimal rewards in dynamic multi-battle competitions," Journal of Public Economics, Elsevier, vol. 160(C), pages 82-95.
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