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Ability grouping in contests

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  • Xiao, Jun

Abstract

This paper considers a planner who can group participants into different competitions for performance ranking and design prize structure in each competition in order to maximize the weighted total performance subject to a positive performance requirement. There are possible spillovers in each competition, because a participant may benefit from others’ performance in the same competition. We show that, whatever the type-specific weights are, separating – assigning participants with the same ability together – is superior to mixing – assigning participants with different abilities together. Moreover, we also characterize the associated optimal prize structures.

Suggested Citation

  • Xiao, Jun, 2023. "Ability grouping in contests," Journal of Mathematical Economics, Elsevier, vol. 104(C).
    • Handle: RePEc:eee:mateco:v:104:y:2023:i:c:s0304406822001185
    DOI: 10.1016/j.jmateco.2022.102792
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    Keywords

    All-pay; Contest; Mixing; Tracking;
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