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Differential treatment and the winner's effort in contests with incomplete information

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  • Wasser, Cédric
  • Zhang, Mengxi

Abstract

We study the design of all-pay contests when the organizer's objective is to maximize the expected winner's effort and contestants have private information about their valuations for the prize. We identify sufficient conditions for every optimal contest to involve differential treatment of ex ante symmetric contestants. Moreover, we provide a complete characterization of optimal contests when valuations are uniformly distributed. Finally, our results for the winner's effort also imply that differential treatment is even more likely to benefit the organizer when her objective is to maximize the expected highest effort.

Suggested Citation

  • Wasser, Cédric & Zhang, Mengxi, 2023. "Differential treatment and the winner's effort in contests with incomplete information," Games and Economic Behavior, Elsevier, vol. 138(C), pages 90-111.
    • Handle: RePEc:eee:gamebe:v:138:y:2023:i:c:p:90-111
    DOI: 10.1016/j.geb.2022.12.004
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    References listed on IDEAS

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    Cited by:

    1. Shanglyu Deng & Hanming Fang & Qiang Fu & Zenan Wu, 2023. "Information Favoritism and Scoring Bias in Contests," PIER Working Paper Archive 23-002, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    2. Li, Bo & Wu, Zenan & Xing, Zeyu, 2023. "Optimally biased contests with draws," Economics Letters, Elsevier, vol. 226(C).

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    More about this item

    Keywords

    Contests; All-pay auction; Favoritism; Winner's effort; Mechanism design;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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