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Learning by Doing in Contests

Author

Listed:
  • J. Clark, Derek

    (University of Tromsø)

  • Nilssen, Tore

    (Dept. of Economics, University of Oslo)

Abstract

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.

Suggested Citation

  • J. Clark, Derek & Nilssen, Tore, 2010. "Learning by Doing in Contests," Memorandum 09/2010, Oslo University, Department of Economics.
    • Handle: RePEc:hhs:osloec:2010_009
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    File URL: https://www.sv.uio.no/econ/english/research/unpublished-works/working-papers/pdf-files/2010/Memo-09-2010.pdf
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    Citations

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    Cited by:

    1. Derek J. Clark & Tore Nilssen, 2021. "Competitive balance when winning breeds winners," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 56(2), pages 363-384, February.
    2. Klein, Arnd Heinrich & Schmutzler, Armin, 2017. "Optimal effort incentives in dynamic tournaments," Games and Economic Behavior, Elsevier, vol. 103(C), pages 199-224.
    3. Esteve-González, Patricia, 2016. "Moral hazard in repeated procurement of services," International Journal of Industrial Organization, Elsevier, vol. 48(C), pages 244-269.
    4. Grossmann, Martin & Hottiger, Dieter, 2020. "Liquidity constraints and the formation of unbalanced contests," International Journal of Industrial Organization, Elsevier, vol. 73(C).
    5. Kai A Konrad, 2018. "Budget and Effort Choice in Sequential Colonel Blotto Campaigns," CESifo Economic Studies, CESifo Group, vol. 64(4), pages 555-576.
    6. Malin Arve & Olga Chiappinelli, 2021. "The Role of Budget Constraints in Sequential Elimination Tournaments," Scandinavian Journal of Economics, Wiley Blackwell, vol. 123(4), pages 1059-1087, October.
    7. Stefan Thiem, 2021. "Spillover Effects in Contests with Heterogeneous Players - Evidence from European Football," Applied Economics, Taylor & Francis Journals, vol. 53(12), pages 1378-1394, March.
    8. Clark, Derek J. & Nilssen, Tore, 2018. "Beating the Matthew Effect: Head Starts and Catching Up in a Dynamic All-Pay Auction," Memorandum 2/2018, Oslo University, Department of Economics.
    9. Derek J. Clark & Tore Nilssen & Jan Yngve Sand, 2020. "Gaining advantage by winning contests," Review of Economic Design, Springer;Society for Economic Design, vol. 24(1), pages 23-38, June.
    10. Clark, Derek J. & Nilssen, Tore & Sand, Jan Yngve, 2012. "Motivating over Time: Dynamic Win Effects in Sequential Contests," Memorandum 28/2012, Oslo University, Department of Economics.
    11. Clark, Derek J. & Nilssen, Tore, 2018. "Keep on fighting: The dynamics of head starts in all-pay auctions," Games and Economic Behavior, Elsevier, vol. 110(C), pages 258-272.
    12. Klein, Arnd Heinrich & Schmutzler, Armin, 2021. "Incentives and motivation in dynamic contests," Journal of Economic Behavior & Organization, Elsevier, vol. 189(C), pages 194-216.
    13. Philipp Denter & John Morgan & Dana Sisak, 2022. "Showing Off or Laying Low? The Economics of Psych-outs," American Economic Journal: Microeconomics, American Economic Association, vol. 14(1), pages 529-580, February.
    14. Derek J. Clark & Tore Nilssen, 2022. "Fatter or fitter? On rewarding and training in a contest," Economic Inquiry, Western Economic Association International, vol. 60(1), pages 101-120, January.
    15. Konstantinos Protopappas, 2022. "Optimal lobbying pricing," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 59(1), pages 37-61, July.
    16. Clark, Derek J. & Nilssen , Tore & Sand, Jan Yngve, 2014. "Keep on Fighting: Dynamic Win Effects in an All-Pay Auction," Memorandum 23/2014, Oslo University, Department of Economics.

    More about this item

    Keywords

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    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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