CONTEST DESIGN AND OPTIMAL ENDOGENOUS ENTRY

C-Tier
Journal: Economic Inquiry
Year: 2010
Volume: 48
Issue: 1
Pages: 80-88

Score contribution per author:

0.503 = (α=2.01 / 2 authors) × 0.5x C-tier

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

Abstract

This paper derives the effort‐maximizing contest rule and the optimal endogenous entry in a context where potential participants bear fixed entry costs. The organizer is allowed to design the contest under a fixed budget with two strategic instruments: the value of the prize purse and a monetary transfer (entry subsidy/fee) to each participating contestant. The results show that the optimally designed contest attracts exactly two participating contestants in its unique subgame perfect equilibrium and extracts all the surplus from participating contestants. The direction (subsidy or fee) and amount of the monetary transfer depend on the magnitude of the entry cost. (JEL C7, D7)

Technical Details

RePEc Handle
repec:bla:ecinqu:v:48:y:2010:i:1:p:80-88
Journal Field
General
Author Count
2
Added to Database
2026-01-25