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Prize allocation and incentives in team contests

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  • Sahuguet, Nicolas
  • Crutzen, Benoît SY
  • Flamand, Sabine

Abstract

We study a contest between teams that compete for multiple indivisible prizes. Team output is a CES function of all the team members' efforts. We use a generalized Tullock contest success function to allocate prizes between teams. We study how different intra-team prize allocation rules impact team output. We consider an egalitarian rule that gives all members the same chance of receiving a prize, and a list rule that sets ex-ante the order in which members receive a prize. The convexity of the cost of effort function and the complementarity of individual efforts determine which rule maximizes team output and success. Our results speak to many real world situations, such as elections, contests for the allocation of local public goods and the internal organization of firms.

Suggested Citation

  • Sahuguet, Nicolas & Crutzen, Benoît SY & Flamand, Sabine, 2017. "Prize allocation and incentives in team contests," CEPR Discussion Papers 12493, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:12493
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    Cited by:

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    3. Sahuguet, Nicolas & Crutzen, Benoît SY & Hideo, Konishi, 2021. "The Best at the Top? Candidate Ranking Strategies under Closed List Proportional Representation," CEPR Discussion Papers 16057, C.E.P.R. Discussion Papers.

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