The optimal allocation of prizes in two-stage contests

Shahar Alshech, Aner Sela

Research output: Contribution to journalArticlepeer-review

Abstract

We study two-stage contests in which the designer can award a prize for winning in each stage, and also a prize for winning in both stages. For this purpose, we analyze the optimal allocation of prizes for a designer who wishes to maximize the players’ total effort when the matches in each stage are modeled as Tullock contests. It is demonstrated that the prize for winning in both stages should be allocated in the two-stage Tullock contest with two players, but not when there are more than two players.

Original languageEnglish
Article number109850
JournalEconomics Letters
Volume203
DOIs
StatePublished - 1 Jun 2021

Keywords

  • Best-of-two contests
  • Tullock contests
  • Two-stage contests

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