Optimal Ties in Contests
I analyze a mechanism design of a tournament in which the principal can strategically enhance the probability of a tie. The principal decides on a ”tie distance” and announces a rule according to which a tie is declared if the difference between the two contestants’ performances is within the tie distance. I show that the contestants’ equilibrium efforts do not depend on the prizes awarded in case of a tie. I find that there are cases in which the optimal mechanism has a positive tie distance.
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- Gershkov, Alex & Perry, Motty, 2006.
"Tournaments with Midterm Reviews,"
Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems
145, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Alex Gershkov & Motty Perry, 2006. "Tournaments with Midterm Reviews," Discussion Paper Series dp414, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem.
- Alex Gershkov & Motty Perry, 2006. "Tournaments with Midterm Reviews," Levine's Bibliography 122247000000001229, UCLA Department of Economics.
- Pradeep Dubey & John Geanakoplos, 2004. "Grading Exams: 100, 99, ..., 1 or A, B, C? Incentives in Games of Status," Cowles Foundation Discussion Papers 1467, Cowles Foundation for Research in Economics, Yale University.
- 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.
- Lazear, Edward P & Rosen, Sherwin, 1981.
"Rank-Order Tournaments as Optimum Labor Contracts,"
Journal of Political Economy,
University of Chicago Press, vol. 89(5), pages 841-64, October.
- Cohen, Daniel & Sela, Aner, 2005. "Contests with Ties," CEPR Discussion Papers 5132, C.E.P.R. Discussion Papers.
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