Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/77579
Authors: 
Jönsson, Stefan
Schmutzler, Armin
Year of Publication: 
2013
Series/Report no.: 
Working Paper Series, Department of Economics, University of Zurich 108
Abstract: 
This paper analyzes how all-pay auctions with endogenous prizes can be used to provide effort incentives. We show that wide classes of effort distributions can be implemented as equilibrium outcomes of such games. We also ask how all-pay auctions have to be structured so as to induce high expected highest efforts without generating excessive wasteful efforts of losers. All-pay auctions with endogenous prizes can do better than all-pay auctions with fixed prizes in this respect, in particular, when the prize function is approximately linear. We use the results to compare patents and prizes as innovation incentives, and to explore promotion incentives in organizations.
Subjects: 
contests
all-pay auctions
endogenous prizes
implementation
JEL: 
D44
D43
D02
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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