Multiple prizes in tournaments with career concerns

• 成果类型: Article
• 署名作者: Correa, Alvaro J. Name; Yildirim, Huseyin
• 署名单位: Universidad Carlos III de Madrid; Duke University
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2023.105778
• 发表日期: 2024
• 关键词: tournaments; contests; career concerns; ranking; Normal order statistic

摘要

We introduce career concerns into rank-order tournaments and offer a novel explanation for the pervasiveness of multiple prizes. We argue that career-concerned individuals, already facing market pressure to perform, will be reluctant to participate in winner-take-all competitions. To entice them and maximize performance, the organizer promises a softer competition through multiple prizes. We show that the minimum number of prizes is single-peaked in the population's talent variance and increasing in publicly disclosed ranks. We also examine entry fees, talent pre-screening, and prize budget as design tools for tournaments, along with prize allocation.