Heterogeneous Outside Options in Contests

12 Pages Posted: 3 Apr 2014

See all articles by Martin Grossmann

Martin Grossmann

University of Zurich - Department of Business Administration (IBW)

Helmut M. Dietl

University of Zurich - Department of Business Administration (IBW)

Date Written: April 2, 2014

Abstract

This article describes a large number of contestants with high and low talent who individually decide to enter a contest or take their heterogeneous outside options. We derive a critical condition for which only high types, only low types, or both types participate in the contest. If a contest organizer worries about the participating type in the contest then he/she should provide a contest with low noise to attract high types. However, if a contest organizer's objective is to maximize the individual effort he/she does not necessarily prefer the high types in the contest.

Keywords: contest, aggregate taking behavior, outside option

JEL Classification: C72, D43, D72, L13

Suggested Citation

Grossmann, Martin and Dietl, Helmut M., Heterogeneous Outside Options in Contests (April 2, 2014). Available at SSRN: https://ssrn.com/abstract=2419420 or http://dx.doi.org/10.2139/ssrn.2419420

Martin Grossmann (Contact Author)

University of Zurich - Department of Business Administration (IBW) ( email )

Hottingerstrasse 10
Plattenstrasse 14
Zurich, 8032
Switzerland

Helmut M. Dietl

University of Zurich - Department of Business Administration (IBW) ( email )

Hottingerstrasse 10
Plattenstrasse 14
Zurich, 8032
Switzerland

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
43
Abstract Views
719
PlumX Metrics