Maximum efforts in contests with asymmetric valuations |
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Authors: | Kofi O. Nti |
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Affiliation: | University of Ghana, P.O. Box LG 78, Legon, Accra, Ghana |
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Abstract: | Efforts may be reduced when players with different valuations participate in a contest. This paper considers the problem of designing a contest to elicit maximum aggregate effort from players with asymmetric valuations. Optimal designs for different classes of contest technologies are computed and characterized. A value weighted contest is optimal in the concave case. In the unconstrained case, the optimal contest is equivalent to a first price all-pay auction with a reserve price. The optimal design discounts the effort of the high valuation player in order to induce him to compete vigorously. |
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Keywords: | Contest design Asymmetric contests Rent-seeking |
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