Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/228899 
Year of Publication: 
2020
Series/Report no.: 
Discussion Papers No. 20-11
Publisher: 
University of Bern, Department of Economics, Bern
Abstract: 
We consider the design of contests for n agents when the principal can choose both the prize profile and the contest success function. Our framework includes Tullock contests, Lazear-Rosen tournaments and all-pay contests as special cases, among others. We show that the optimal contest has an intermediate degree of competitiveness in the contest success function, and a minimally competitive prize profile with n􀀀1 identical prizes. The optimum can be achieved with a nested Tullock contest. We extend the model to allow for imperfect performance measurement and for heterogeneous agents. We relate our results to a recent literature which has asked similar questions but has typically focused on the design of either the prize profile or the contest success function.
Subjects: 
contest design
optimal contests
tournaments
JEL: 
D02
D82
M52
Document Type: 
Working Paper

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