Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/69449
Authors: 
Epstein, Gil S.
Mealem, Yosef
Nitsan, Shemuel
Year of Publication: 
2012
Series/Report no.: 
Discussion Paper Series, Forschungsinstitut zur Zukunft der Arbeit 7032
Abstract: 
The form of contests for a single fixed prize can be determined by a designer who maximizes the contestants' efforts. This paper establishes that, under common knowledge of the two asymmetric contestants' prize valuations, a fair Tullock-type endogenously determined lottery is always superior to an all-pay-auction; it yields larger expected efforts (revenues) for the contest designer. If the contest can be unfair (structural discrimination is allowed), then the designer's payoff under the optimal lottery is equal to his expected payoff under the optimal all-pay auction.
Subjects: 
contest design
efforts (revenue) maximization
discrimination
endogenous lottery
all-pay auction
JEL: 
D70
D71
D72
Document Type: 
Working Paper

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