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Winner's Effort Maximization in Large Contests

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  • Stefano Barbieri
  • Marco Serena

Abstract

We investigate the temporal structure that maximizes the winner's effort in large homogeneous contests, thus extending Hinnosaar (2019)'s analysis of total effort. We find that the winner's effort ranges from a lower bound of 0 to an upper bound of one third of the value of the prize, depending on the temporal structure; the upper (lower) bound is reached with an infinite number of players playing sequentially (simultaneously) in the first periods (period). This is in line with Hinnosaar's results for total effort. Nevertheless, when compare the speed of convergence of different temporal structures to the upper bound for the winner's effort, we prove the suboptimality of the fully sequential temporal structure, which is dominated by an initial number of fully sequential moves and a greater number of fully simultaneous moves in the very last period. This is in contrast with Hinnosaar's results for total effort.

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  • Stefano Barbieri & Marco Serena, 2020. "Winner's Effort Maximization in Large Contests," Working Papers tax-mpg-rps-2020-13, Max Planck Institute for Tax Law and Public Finance.
    • Handle: RePEc:mpi:wpaper:tax-mpg-rps-2020-13
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    References listed on IDEAS

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    1. Olszewski, Wojciech & Siegel, Ron, 2020. "Performance-maximizing large contests," Theoretical Economics, Econometric Society, vol. 15(1), January.
    2. Michael R. Baye & Dan Kovenock & Casper G. Vries, 2008. "Rigging the lobbying process: An application of the all-pay auction," Springer Books, in: Roger D. Congleton & Kai A. Konrad & Arye L. Hillman (ed.), 40 Years of Research on Rent Seeking 2, pages 331-336, Springer.
    3. Jorge Lemus & Guillermo Marshall, 2021. "Dynamic Tournament Design: Evidence from Prediction Contests," Journal of Political Economy, University of Chicago Press, vol. 129(2), pages 383-420.
    4. Hinnosaar, Toomas, 2024. "Optimal sequential contests," Theoretical Economics, Econometric Society, vol. 19(1), January.
    5. Glazer, Amihai & Hassin, Refael, 2000. "Sequential Rent Seeking," Public Choice, Springer, vol. 102(3-4), pages 219-228, March.
    6. Toomas Hinnosaar, 2019. "Contest Architecture with Public Disclosures," Papers 1905.11004, arXiv.org, revised May 2019.
    7. Drugov, Mikhail & Ryvkin, Dmitry, 2017. "Biased contests for symmetric players," Games and Economic Behavior, Elsevier, vol. 103(C), pages 116-144.
    8. Hao Jia, 2008. "A stochastic derivation of the ratio form of contest success functions," Public Choice, Springer, vol. 135(3), pages 125-130, June.
    9. Bodoh-Creed, Aaron L. & Hickman, Brent R., 2018. "College assignment as a large contest," Journal of Economic Theory, Elsevier, vol. 175(C), pages 88-126.
    10. Shanglyu Deng & Hanming Fang & Qiang Fu & Zenan Wu, 2020. "Confidence Management in Tournaments," NBER Working Papers 27186, National Bureau of Economic Research, Inc.
    11. Deng, Shanglyu & Wang, Xiruo & Wu, Zenan, 2018. "Incentives in lottery contests with draws," Economics Letters, Elsevier, vol. 163(C), pages 1-5.
    12. Olszewski, Wojciech & Siegel, Ron, 2019. "Bid caps in large contests," Games and Economic Behavior, Elsevier, vol. 115(C), pages 101-112.
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    Cited by:

    1. Hideo Konishi & Nicolas Sahuguet & Benoît S. Y. Crutzen, 2024. "Allocation rules of indivisible prizes in team contests," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 78(1), pages 69-100, August.
    2. 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.

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