Contest Design with Stochastic Performance

• 成果类型: Article
• 署名作者: Kirkegaard, Rene
• 署名单位: University of Guelph
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MICROECONOMICS
• ISSN/ISSBN: 1945-7669
• DOI: 10.1257/mic.20200422
• 发表日期: 2023
• 页码: 201-238
• 关键词: 1st-order approach; success functions; moral-hazard; DISCRIMINATION; prizes

摘要

This paper studies optimal contest design in contests with noisy per-formance. Here, contest design is a team moral hazard problem that endogenizes the assignment rule that maps performance profiles into winning probabilities. The optimal design features endogenous stan-dards for eligibility, and the number of prizes that are awarded may be stochastic. Generally, one group of agents is identified as first claim-ants of prizes, contingent on performance exceeding a threshold of excellence. However, which group wins prizes more often depends on the designer's objective function and the performance technologies. Finally, the approach derives endogenous, microfounded, and fully optimal contest success functions. (JEL D44, D82)