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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File URL: https://www.sv.uio.no/econ/english/research/unpublished-works/working-papers/pdf-files/2010/Memo-09-2010.pdf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. 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.
  2. 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.
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  4. 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.
  5. Moldovanu, Benny & Sela, Aner, 2002. "Contest Architecture," Sonderforschungsbereich 504 Publications 02-06, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
  6. Konrad, Kai A. & Kovenock, Dan, 2009. "Multi-battle contests," Games and Economic Behavior, Elsevier, vol. 66(1), pages 256-274, May.
  7. 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.
  8. 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.
  9. Chowdhury, Subhasish M. & Sheremeta, Roman M., 2011. "Multiple equilibria in Tullock contests," Economics Letters, Elsevier, vol. 112(2), pages 216-219, August.
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  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.
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  17. 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.
  18. Fu, Qiang & Lu, Jingfeng, 2009. "Contest with pre-contest investment," Economics Letters, Elsevier, vol. 103(3), pages 142-145, June.
  19. Marco Runkel, 2006. "Optimal contest design, closeness and the contest success function," Public Choice, Springer, vol. 129(1), pages 217-231, October.
  20. 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.
  21. Lockard, Alan A, 2003. "Decision by Sortition: A Means to Reduce Rent-Seeking," Public Choice, Springer, vol. 116(3-4), pages 435-51, September.
  22. Baik, Kyung Hwan & Lee, Sanghack, 2000. "Two-Stage Rent-Seeking Contests with Carryovers," Public Choice, Springer, vol. 103(3-4), pages 285-96, June.
  23. Dmitry Ryvkin, 2009. "Fatigue in dynamic tournaments," Working Papers wp2009_06_03, Department of Economics, Florida State University.
  24. Szymanski, Stefan & Valletti, Tommaso M., 2005. "Incentive effects of second prizes," European Journal of Political Economy, Elsevier, vol. 21(2), pages 467-481, June.
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