TY - JOUR
T1 - DISCRIMINATION IN A MODEL OF CONTESTS WITH INCOMPLETE INFORMATION ABOUT ABILITY
AU - Pérez-Castrillo, David
AU - Wettstein, David
N1 - Publisher Copyright:
© (2016) by the Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association
PY - 2016/8/1
Y1 - 2016/8/1
N2 - We study contests with private information and identical contestants, where contestants' efforts and innate abilities generate output of varying qualities. The designer's revenue depends on the quality of the output, and she offers a reward to the contestant achieving the highest quality. We characterize the equilibrium behavior, outcomes, and payoffs for both nondiscriminatory and discriminatory (where the reward is contestant-dependent) contests. We derive conditions under which the designer obtains a larger payoff when using a discriminatory contest and describe settings, where these conditions are satisfied.
AB - We study contests with private information and identical contestants, where contestants' efforts and innate abilities generate output of varying qualities. The designer's revenue depends on the quality of the output, and she offers a reward to the contestant achieving the highest quality. We characterize the equilibrium behavior, outcomes, and payoffs for both nondiscriminatory and discriminatory (where the reward is contestant-dependent) contests. We derive conditions under which the designer obtains a larger payoff when using a discriminatory contest and describe settings, where these conditions are satisfied.
UR - http://www.scopus.com/inward/record.url?scp=84981537785&partnerID=8YFLogxK
U2 - 10.1111/iere.12179
DO - 10.1111/iere.12179
M3 - Article
AN - SCOPUS:84981537785
SN - 0020-6598
VL - 57
SP - 881
EP - 914
JO - International Economic Review
JF - International Economic Review
IS - 3
ER -