Choosing the Prize in Contests
27 Pages Posted: 13 Jun 2022 Last revised: 7 Sep 2022
Date Written: June 1, 2022
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.
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