The Optimal Allocation of Prizes in Contests

S-Tier
Journal: American Economic Review
Year: 2001
Volume: 91
Issue: 3
Pages: 542-558

Score contribution per author:

4.022 = (α=2.01 / 2 authors) × 4.0x S-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We study a contest with multiple, nonidentical prizes. Participants are privately informed about a parameter (ability) affecting their costs of effort. The contestant with the highest effort wins the first prize, the contestant with the second-highest effort wins the second prize, and so on until all the prizes are allocated. The contest's designer maximizes expected effort. When cost functions are linear or concave in effort, it is optimal to allocate the entire prize sum to a single "first" prize. When cost functions are convex, several positive prizes may be optimal.

Technical Details

RePEc Handle
repec:aea:aecrev:v:91:y:2001:i:3:p:542-558
Journal Field
General
Author Count
2
Added to Database
2026-01-26