Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/175226 
Year of Publication: 
2016
Series/Report no.: 
Working Paper No. 789
Publisher: 
Queen Mary University of London, School of Economics and Finance, London
Abstract: 
Do the contests with the largest prizes attract the most-able contestants? To what extent do contestants avoid competition? In this paper, we show, theoretically and empirically, that the distribution of abilities plays a crucial role in determining contest choice. Complete sorting exists only when the proportion of high-ability contestants is sufficiently small. As this proportion increases, high-ability contestants shy away from competition and sorting decreases, such that, reverse sorting becomes a possibility. We test our theoretical predictions with a large panel data set containing contest choice over twenty years. We use exogenous variation in the participation of highly-able competitors to provide empirical evidence for the relationship among prizes, competition, and sorting.
Subjects: 
Contests
Competition
Sorting
Incentives
JEL: 
L20
M52
D02
Document Type: 
Working Paper

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