IDEAS home Printed from https://ideas.repec.org/p/usg/econwp/201218.html
   My bibliography  Save this paper

Orchestrating Contests with Heterogeneous Participants

Author

Listed:
  • Stracke, Rudi

Abstract

This paper compares static one-stage and dynamic two-stage contests with heterogeneous participants. I find that aggregate effort provision (AEP) is strictly higher in the dynamic than in the static format in any interior equilibrium with heterogeneous contestants. Since AEP is identical in both formats in case of homogeneity, this finding suggests that the well-known (adverse) incentive effect of heterogeneity crucially depends on the structure of the competition – the effect is lower in dynamic than in static formats. The paper also shows that heterogeneity between contestants is crucial to explain recent empirical evidence on the comparison of different contest structures.

Suggested Citation

  • Stracke, Rudi, 2012. "Orchestrating Contests with Heterogeneous Participants," Economics Working Paper Series 1218, University of St. Gallen, School of Economics and Political Science.
    • Handle: RePEc:usg:econwp:2012:18
    as

    Download full text from publisher

    File URL: http://ux-tauri.unisg.ch/RePEc/usg/econwp/EWP-1218.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. O'Keeffe, Mary & Viscusi, W Kip & Zeckhauser, Richard J, 1984. "Economic Contests: Comparative Reward Schemes," Journal of Labor Economics, University of Chicago Press, vol. 2(1), pages 27-56, January.
    2. Richard Cornes & Roger Hartley, 2005. "Asymmetric contests with general technologies," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 26(4), pages 923-946, November.
    3. Stein, William E, 2002. "Asymmetric Rent-Seeking with More Than Two Contestants," Public Choice, Springer, vol. 113(3-4), pages 325-336, December.
    4. Qiang Fu & Jingfeng Lu, 2012. "The optimal multi-stage contest," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 51(2), pages 351-382, October.
    5. Uwe Sunde, 2009. "Heterogeneity and performance in tournaments: a test for incentive effects using professional tennis data," Applied Economics, Taylor & Francis Journals, vol. 41(25), pages 3199-3208.
    6. Jennifer Brown, 2011. "Quitters Never Win: The (Adverse) Incentive Effects of Competing with Superstars," Journal of Political Economy, University of Chicago Press, vol. 119(5), pages 982-1013.
    7. Nti, Kofi O, 1999. "Rent-Seeking with Asymmetric Valuations," Public Choice, Springer, vol. 98(3-4), pages 415-430, March.
    8. Amegashie, J Atsu, 2000. "Some Results on Rent-Seeking Contests with Shortlisting," Public Choice, Springer, vol. 105(3-4), pages 245-253, December.
    9. Höchtl, Wolfgang & Kerschbamer, Rudolf & Stracke, Rudi & Sunde, Uwe, 2011. "Incentives vs. Selection in Promotion Tournaments: Can a Designer Kill Two Birds with One Stone?," IZA Discussion Papers 5755, Institute of Labor Economics (IZA).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rudi Stracke & Wolfgang Höchtl & Rudolf Kerschbamer & Uwe Sunde, 2015. "Incentives and Selection in Promotion Contests: Is It Possible to Kill Two Birds with One Stone?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 36(5), pages 275-285, July.
    2. Konrad, Kai A., 2007. "Strategy in contests: an introduction [Strategie in Turnieren – eine Einführung]," Discussion Papers, Research Unit: Market Processes and Governance SP II 2007-01, WZB Berlin Social Science Center.
    3. Subhasish M. Chowdhury & Patricia Esteve‐González & Anwesha Mukherjee, 2023. "Heterogeneity, leveling the playing field, and affirmative action in contests," Southern Economic Journal, John Wiley & Sons, vol. 89(3), pages 924-974, January.
    4. Stracke, Rudi & Sunde, Uwe, 2014. "Dynamic Incentive Effects of Heterogeneity in Multi-Stage Promotion Contests," IZA Discussion Papers 8368, Institute of Labor Economics (IZA).
    5. St-Pierre, Marc, 2016. "The role of inequality on effort in tournaments," Mathematical Social Sciences, Elsevier, vol. 81(C), pages 38-52.
    6. Gerd Muehlheusser & Sandra Schneemann & Dirk Sliwka, 2016. "The Impact Of Managerial Change On Performance: The Role Of Team Heterogeneity," Economic Inquiry, Western Economic Association International, vol. 54(2), pages 1128-1149, April.
    7. Jörg Franke, 2007. "Does Affirmative Action Reduce Effort Incentives? A Contest Game Analysis," UFAE and IAE Working Papers 711.07, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    8. Stracke, Rudi, 2013. "Contest design and heterogeneity," Economics Letters, Elsevier, vol. 121(1), pages 4-7.
    9. Hörtnagl-Pozzo, Tanja & Kerschbamer, Rudolf & Oexl, Regine & Stracke, Rudi & Sunde, Uwe, 2023. "Heterogeneity in rent-seeking contests with multiple stages: Theory and experimental evidence," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 105(C).
    10. Dahm, Matthias & Esteve-González, Patricia, 2018. "Affirmative action through extra prizes," Journal of Economic Behavior & Organization, Elsevier, vol. 153(C), pages 123-142.
    11. Cedric Duvinage & Peter-J. Jost, 2019. "The Role of Referees in Professional Sports Contests," Journal of Sports Economics, , vol. 20(8), pages 1014-1050, December.
    12. Lackner, Mario & Stracke, Rudi & Sunde, Uwe & Winter-Ebmer, Rudolf, 2015. "Are Competitors Forward Looking in Strategic Interactions? Evidence from the Field," Economics Series 319, Institute for Advanced Studies.
    13. Matthias Kräkel, 2014. "Optimal seedings in elimination tournaments revisited," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 2(1), pages 77-91, April.
    14. Wang Zhewei, 2010. "The Optimal Accuracy Level in Asymmetric Contests," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 10(1), pages 1-18, April.
    15. S. Cotton, Christopher & Li, Cheng & McIntyre, Frank & P. Price, Joseph, 2015. "Which explanations for gender differences in competition are consistent with a simple theoretical model?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 59(C), pages 56-67.
    16. Frimmel, Wolfgang & Horvath, Thomas & Schnalzenberger, Mario & Winter-Ebmer, Rudolf, 2018. "Seniority wages and the role of firms in retirement," Journal of Public Economics, Elsevier, vol. 164(C), pages 19-32.
    17. Gallice, Andrea, 2017. "An approximate solution to rent-seeking contests with private information," European Journal of Operational Research, Elsevier, vol. 256(2), pages 673-684.
    18. Roman M. Sheremeta, 2011. "Contest Design: An Experimental Investigation," Economic Inquiry, Western Economic Association International, vol. 49(2), pages 573-590, April.
    19. Christopher Cotton & Frank McIntyre & Joseph Price, 2010. "Causes of Gender Differences in Competition: Theory and Evidence," Working Papers 2010-19, University of Miami, Department of Economics.
    20. Giuseppe Dari-Mattiacci & Eric Langlais & Bruno Lovat & Francesco Parisi, 2013. "Asymmetries in Rent-Seeking," Working Papers hal-04141218, HAL.

    More about this item

    Keywords

    Multi-Stage Contest; Heterogeneity; Contest Design;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:usg:econwp:2012:18. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/vwasgch.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.