Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/56924
Authors: 
Suzuki, Toru
Year of Publication: 
2010
Series/Report no.: 
Jena economic research papers 2010,083
Abstract: 
Agents compete to solve a problem. Each agent knows own computational capacity as private information and simultaneously chooses either a risky or a safe problem solving method. This paper analyzes the optimal prize schemes from the perspective of the prize designer who wishes to find a solution as quick as possible. It is shown that (i) the winner-take-all scheme can induce excessive risk taking and make problem solving slower (ii) prize schemes with milder competitive pressure induce the optimal risk taking and quicker problem solving.
Subjects: 
optimal prize scheme
risk taking
problem solving
JEL: 
D82
Document Type: 
Working Paper

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