Performance-maximizing large contests

• 成果类型: Article
• 署名作者: Olszewski, Wojciech; Siegel, Ron
• 署名单位: Northwestern University; Pennsylvania Commonwealth System of Higher Education (PCSHE); Pennsylvania State University; Pennsylvania State University - University Park
• 刊物名称: THEORETICAL ECONOMICS
• ISSN/ISSBN: 1933-6837
• DOI: 10.3982/TE3588
• 发表日期: 2020-01-01
• 页码: 57-88
• 关键词: Large contests; contest design; optimal contests; mechanism design

摘要

Many sales, sports, and research contests are put in place to maximize contestants' performance. We investigate and provide a complete characterization of the prize structures that achieve this objective in settings with many contestants. The contestants may be ex ante asymmetric in their abilities and prize valuations, and there may be complete or incomplete information about these parameters. The prize valuations and performance costs may be linear, concave, or convex. A main novel takeaway is that awarding numerous different prizes whose values gradually decline with contestants' ranking is optimal in the typical case of contestants with convex performance costs and concave prize valuations. This suggests that many real-world contests can be improved by increasing the number of prizes and making them more heterogeneous. The techniques we develop can also be used to formulate and solve other contest design questions that have so far proven intractable.