Contests with insurance

Yizhaq Minchuk, Aner Sela

Research output: Contribution to journalArticlepeer-review

2 Scopus citations

Abstract

We study all-pay auctions under incomplete information in which contestants have non-linear effort functions. The designer offers the option of insurance for which a contestant pays a premium to the contest designer. If a contestant does not win he is reimbursed the cost of his effort. We demonstrate that contests with insurance may be profitable for a designer who wishes to maximize his expected revenue as based on the contestants’ expected total effort, the premium of the insured contestants, and their reimbursement.

Original languageEnglish
Pages (from-to)1-22
Number of pages22
JournalReview of Economic Design
Volume24
Issue number1-2
DOIs
StatePublished - 1 Jun 2020

Keywords

  • All-pay auctions
  • Contests
  • Insurance
  • Reimbursement

ASJC Scopus subject areas

  • Economics, Econometrics and Finance (all)

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