Search Contests

We study contests in which players search sequentially, drawing from a distribution at a cost per draw, and the highest accepted value wins the prize. We analyze unlimited and bounded search, with and without recall. Equilibria are distribution-free, depending only on the number of players, search depth, and the cost-prize ratio. With multiple prizes, equilibrium depends only on the average and the last-place prize. Entry has two effects, discouragement, which lowers the acceptance threshold, and selectivity, which raises it. With unlimited search, competition dissipates all rents, leaving only discouragement. With bounded search, rents survive, selectivity dominates at low cost, and the threshold is single-peaked in the number of players. In large fields discouragement prevails. A planner’s optimal prize is invariant to location shifts and rises with tail thickness. Two players are optimal with unlimited search, while heavy tails favor larger fields when search is bounded.