Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/76524 
Authors: 
Year of Publication: 
2003
Series/Report no.: 
CESifo Working Paper No. 1009
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
This paper investigates optimal contest design when the designer's payoff is increasing in competitive balance between contestants. A two-player contest with asymmetric effort costs (asymmetric abilities) is considered. Competitive balance is measured by the difference in winning probabilities of the contestants. In contrast to previous studies, the impact of competitive balance on the optimal prize is not unique, but depends on the shape of the contest success function. Furthermore, it is shown that including competitive balance in the designer's objective may induce the designer to increase the contestants effort costs, for example, by tightening the rules of the contest.
Subjects: 
optimal contest design
competitive balance
Document Type: 
Working Paper
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