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Title:Competitive problem solving and the optimal prize schemes PDF Logo
Authors:Suzuki, Toru
Issue Date: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
Appears in Collections:Jena Economic Research Papers, MPI für Ökonomik

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