The Impact of Tie Intervals on Rank-Based Contests

50 Pages Posted: 18 Sep 2024

See all articles by Linsheng Zhuang

Linsheng Zhuang

National University of Singapore (NUS) - Institute for Operations Research and Analytics

Zhi Chen

National University of Singapore (NUS)

Jussi Keppo

National University of Singapore (NUS) - NUS Business School

Date Written: August 19, 2024

Abstract

In many real-world competitions, heterogeneous players must achieve a substantial advantage to secure victory. We build a contest model that connects this phenomenon by integrating rank-based innovation contest and tug-of-war. Specifically, in our model, there is an interval of output gap where a tie occurs. We find that in equilibrium, players exert a low effort level in the interior of the interval and may exert a high effort level around the two boundaries (where players are about to win or lose). Hence, when this interval is small, the contest is close to being rank-based, and the players exert a high effort level when they are close. When the interval is large, winning is difficult, and therefore, players exert a low effort level even when they are close. This discouragement effect from the tie interval for players who are close strengthens with the tie reward and weakens as contest uncertainty increases.

Keywords: Innovation Contest, Tug-of-War, Information Disclosure, Participation

Suggested Citation

Zhuang, Linsheng and Chen, Zhi and Keppo, Jussi, The Impact of Tie Intervals on Rank-Based Contests (August 19, 2024). Available at SSRN: https://ssrn.com/abstract=4930136 or http://dx.doi.org/10.2139/ssrn.4930136

Linsheng Zhuang (Contact Author)

National University of Singapore (NUS) - Institute for Operations Research and Analytics ( email )

Singapore

HOME PAGE: http://www.zhuanglinsheng.com

Zhi Chen

National University of Singapore (NUS)

Jussi Keppo

National University of Singapore (NUS) - NUS Business School ( email )

Mochtar Riady Building
15 Kent Ridge Drive
Singapore, 119245
Singapore

HOME PAGE: http://https://www.jussikeppo.com

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