Optimal prizes in dynamic elimination contests: Theory and experimental evidence

Arbeitspapier

This paper investigates the implications of different prize structures on effort provision in dynamic (two-stage) elimination contests. Theoretical results show that, for risk-neutral participants, a structure with a single prize for the winner of the contest maximizes total effort, while a structure with two appropriately chosen prizes (a runner-up prize and a final prize) ensures incentive maintenance across stages. In contrast, a structure with two prizes may dominate a winner-takes-all contest in both dimensions if participants are risk-averse. Evidence from laboratory experiments is largely consistent with these predictions, suggesting that contest design should account for risk attitudes of participants.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Working Papers in Economics and Statistics ; No. 2014-08

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Noncooperative Games ; Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior ; Compensation Packages; Payment Methods
• Thema: Dynamic Contests ; Multiple Prizes ; Risk Aversion ; Experiment ; Over-provision

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Stracke, Rudi ; Höchtl, Wolfgang ; Kerschbamer, Rudolf ; Sunde, Uwe
• Ereignis: Veröffentlichung
• (wer): University of Innsbruck, Research Platform Empirical and Experimental Economics (eeecon)
• (wo): Innsbruck
• (wann): 2014

Weitere Informationen

• Handle: http://hdl.handle.net/10419/101100
• Letzte Aktualisierung: 10.03.2025, 11:46 MEZ