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Learning by Doing in Contests

  • J. Clark, Derek

    ()

    (University of Tromsø)

  • Nilssen, Tore

    ()

    (Dept. of Economics, University of Oslo)

We introduce learning by doing in a dynamic contest. Contestants compete in an early round and can use the experience gained to reduce effort cost in a subsequent contest. A contest designer can decide how much of the prize mass to distribute in the early contest and how much to leave for the later one in order to maximize total efforts. We show how this division affects effort at each stage, and present conditions that characterize the optimal split. The results are indicative of the fact that the designer weakly prefers to leave most of the prize mass for the second contest to reap the gains from the learning by doing effect.

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File URL: https://www.sv.uio.no/econ/english/research/unpublished-works/working-papers/pdf-files/2010/Memo-09-2010.pdf
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Paper provided by Oslo University, Department of Economics in its series Memorandum with number 09/2010.

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Length: 20 pages
Date of creation: 11 May 2010
Date of revision:
Publication status: Published as J. Clark, Derek and Tore Nilssen, 'Learning by Doing in Contests' in Public Choice, 2013, pages 329-343.
Handle: RePEc:hhs:osloec:2010_009
Contact details of provider: Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
Phone: 22 85 51 27
Fax: 22 85 50 35
Web page: http://www.oekonomi.uio.no/indexe.html
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  1. Konrad, Kai A. & Kovenock, Dan, 2006. "Multi-battle contests," Purdue University Economics Working Papers 1187, Purdue University, Department of Economics.
  2. Martin Grossmann & Helmut M. Dietl, 2009. "Investment Behaviour in a Two-Period Contest Model," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 165(3), pages 401-417, September.
  3. Baye, Michael R. & Hoppe, Heidrun C., 2003. "The strategic equivalence of rent-seeking, innovation, and patent-race games," Games and Economic Behavior, Elsevier, vol. 44(2), pages 217-226, August.
  4. 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.
  5. Subhashish Modak Chowdhury & Roman M. Sheremeta, 2010. "Multiple equilibria in Tullock contests," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 10-12, School of Economics, University of East Anglia, Norwich, UK..
  6. Kai A. Konrad, 2002. "Investment in the Absence of Property Rights: The Role of Incumbency Advantages," CESifo Working Paper Series 698, CESifo Group Munich.
  7. Dmitry Ryvkin, 2011. "Fatigue in Dynamic Tournaments," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 20(4), pages 1011-1041, December.
  8. Nti, Kofi O, 1999. " Rent-Seeking with Asymmetric Valuations," Public Choice, Springer, vol. 98(3-4), pages 415-30, March.
  9. Drew Fudenberg & Jean Tirole, 1983. "Learning-by-Doing and Market Performance," Bell Journal of Economics, The RAND Corporation, vol. 14(2), pages 522-530, Autumn.
  10. Richard L. Fullerton & R. Preston McAfee, 1999. "Auctioning Entry into Tournaments," Journal of Political Economy, University of Chicago Press, vol. 107(3), pages 573-605, June.
  11. Szymanski, Stefan & Valletti, Tommaso M., 2005. "Incentive effects of second prizes," European Journal of Political Economy, Elsevier, vol. 21(2), pages 467-481, June.
  12. Stefan Szymanski, 2003. "The Economic Design of Sporting Contests," Journal of Economic Literature, American Economic Association, vol. 41(4), pages 1137-1187, December.
  13. Moldovanu, Benny & Sela, Aner, 2006. "Contest architecture," Journal of Economic Theory, Elsevier, vol. 126(1), pages 70-96, January.
  14. Johansson, Börje & Karlsson, Charlie & Backman, Mikaela & Juusola, Pia, 2007. "The Lisbon Agenda From 2000 To 2010," Working Paper Series in Economics and Institutions of Innovation 106, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  15. Fu, Qiang & Lu, Jingfeng, 2009. "Contest with pre-contest investment," Economics Letters, Elsevier, vol. 103(3), pages 142-145, June.
  16. Mark Gradstein, 1995. "Intensity Of Competition, Entry And Entry Deterrence In Rent Seeking Contests," Economics and Politics, Wiley Blackwell, vol. 7(1), pages 79-91, 03.
  17. 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.
  18. Marco Runkel, 2006. "Optimal contest design, closeness and the contest success function," Public Choice, Springer, vol. 129(1), pages 217-231, October.
  19. Konrad, Kai A., 2009. "Strategy and Dynamics in Contests," OUP Catalogue, Oxford University Press, number 9780199549603.
  20. Rick Harbaugh & Tilman Klumpp, 2005. "Early Round Upsets and Championship Blowouts," Economic Inquiry, Western Economic Association International, vol. 43(2), pages 316-329, April.
  21. Clark, Derek J & Riis, Christian, 1998. "Competition over More Than One Prize," American Economic Review, American Economic Association, vol. 88(1), pages 276-89, March.
  22. Klumpp, Tilman & Polborn, Mattias K., 2006. "Primaries and the New Hampshire Effect," Journal of Public Economics, Elsevier, vol. 90(6-7), pages 1073-1114, August.
  23. Lockard, Alan A, 2003. " Decision by Sortition: A Means to Reduce Rent-Seeking," Public Choice, Springer, vol. 116(3-4), pages 435-51, September.
  24. Robert Ritz, 2008. "Influencing rent-seeking contests," Public Choice, Springer, vol. 135(3), pages 291-300, June.
  25. Baik, Kyung Hwan & Lee, Sanghack, 2000. " Two-Stage Rent-Seeking Contests with Carryovers," Public Choice, Springer, vol. 103(3-4), pages 285-96, June.
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