The Ponds Dilemma

• 成果类型: Article
• 署名作者: Morgan, John; Sisak, Dana; Vardy, Felix
• 署名单位: International Monetary Fund; University of California System; University of California Berkeley; Erasmus University Rotterdam - Excl Erasmus MC; Erasmus University Rotterdam; Tinbergen Institute
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1111/ecoj.12473
• 发表日期: 2018
• 页码: 1634-1682
• 关键词: competition; tournaments; STABILITY; earnings; contests

摘要

Is it better to be a big fish in a small pond or a small fish in a big pond? To find out, we study self-selection into contests. Our simple model predicts that: (i) entry into the big pond - in terms of show-up fees, number or value of prizes - is non-monotonic in ability; (ii) entry into the more meritocratic pond is likewise non-monotonic, exhibiting two interior extrema and disproportionately attracting very low ability types; and (iii) changes in rewards can produce unexpected effects, e.g. higher show-up fees may lower entry, while higher prizes or more meritocracy may lower the average ability of entrants.