Choosing the Prize in Contests

27 Pages Posted: 13 Jun 2022 Last revised: 7 Sep 2022

See all articles by Nicolas de Roos

Nicolas de Roos

University of Liverpool; University of Sydney

Alexander Matros

Moore School of Business

Vladimir Smirnov

The University of Sydney - School of Economics

Zehra Valencia

University of South Carolina - Department of Economics

Date Written: June 1, 2022

Abstract

In many contests, a participant’s choices can influence the value of the prize on offer. However, in the standard contest model, the value of the prize is exogenous and participants have discretion only over the effort they exert. This paper proposes a new type of N -player contest in which each participant chooses both her own prize and effort. We present a general model and establish sufficient conditions for equilibrium existence. We then describe sufficient conditions for the existence of symmetric equilibria, and discuss comparative statics with respect to the number of players. Finally, we discuss asymmetric contests.

Keywords: Contests

Suggested Citation

de Roos, Nicolas and Matros, Alexander and Smirnov, Vladimir and Valencia, Zehra, Choosing the Prize in Contests (June 1, 2022). Available at SSRN: https://ssrn.com/abstract=4129408 or http://dx.doi.org/10.2139/ssrn.4129408

Nicolas De Roos (Contact Author)

University of Liverpool ( email )

Chatham Street
Brownlow Hill
Liverpool, L69 7ZA
United Kingdom

University of Sydney ( email )

University of Sydney
Sydney NSW 2006
Australia

Alexander Matros

Moore School of Business ( email )

1014 Greene St
Columbia, SC 29208
United States

Vladimir Smirnov

The University of Sydney - School of Economics ( email )

Rm 370 Merewether (H04)
The University of Sydney
Sydney, NSW 2006 2008
Australia

Zehra Valencia

University of South Carolina - Department of Economics ( email )

1014 Green Street
Columbia, SC 29208
United States

HOME PAGE: http://https://sites.google.com/view/zehravalencia/home

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