Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/252118 
Authors: 
Year of Publication: 
2022
Series/Report no.: 
CESifo Working Paper No. 9601
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
I characterize the optimal accuracy level r of an unbiased Tullock contest between two players with heterogeneous prize valuations. The designer maximizes the winning probability of the strong player or the winner's expected valuation by choosing a contest with an all-pay auction equilibrium (r ≥ 2). By contrast, if she aims at maximizing the expected aggregate effort or the winner's expected effort, she will choose a contest with a pure-strategy equilibrium, and the optimal accuracy level r < 2 decreases in the players' heterogeneity. Finally, a contest designer who faces a tradeoff between selection quality and minimum (maximum) effort will never (may) chose a contest with a semi-mixed equilibrium.
Subjects: 
Tullock contest
heterogeneous valuations
accuracy
discrimination
optimal design
all-pay auction
JEL: 
C72
D72
Document Type: 
Working Paper
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