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Two-Stage Contests with Preferences over Style

Author

Listed:
  • David Wettstein

    (BGU)

  • Todd R. Kaplan

    (University of Haifa)

Abstract

Many grant applications have a preliminary stage where only a select group are invited to submit a full application. Similarly, procurement contracts by governments are often awarded through a two-stage procedure. We model and analyze such environments where the designer cares about the style of the application as well as its quality. The designer has the option of choosing an initial stage, where contestants can enter and learn about their desirability while the designer learns about their style. We determine closed form solutions for equilibrium outcomes and designer payoffs and use this to analyze design questions regarding whether or not a second stage is desirable, different rules for deciding who will advance, as with whether or not to communicate the number of contestants that qualify for the second stage.
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Suggested Citation

  • David Wettstein & Todd R. Kaplan, 2016. "Two-Stage Contests with Preferences over Style," Working Papers 1607, Ben-Gurion University of the Negev, Department of Economics.
    • Handle: RePEc:bgu:wpaper:1607
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    References listed on IDEAS

    as
    1. Sela, Aner, 2011. "Best-of-three all-pay auctions," Economics Letters, Elsevier, vol. 112(1), pages 67-70, July.
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    Cited by:

    1. Kai A. Konrad & Dan Kovenock, 2022. "Introduction to the Special Issue on Contests," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 74(4), pages 1017-1023, November.

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    More about this item

    Keywords

    contests; innovation; all-pay auctions; mechanism design.;
    All these keywords.

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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