Speaker: Liu Shuo, assistant professor at Guanghua School of Management, Peking University

Date: November 9, 2022

Time: 19:00-20:00

Location: Zoom

Sponsor: School of Mathematics, Shandong University

Abstract:

We consider the design of contests when the principal can choose both the prize profile and how the prizes are allocated as a function of a possibly noisy signal about the agents’efforts. We provide sufficient conditions that guarantee optimality of a contest. Optimal contests have a minimally competitive prize profile and an intermediate degree of competitiveness in the contest success function. Whenever observation is not too noisy, the optimum can be achieved by an all-pay auction with a cap. When observation is perfect, the optimum can also be achieved by a nested Tullock contest. We relate our results to a recent literature which has asked similar questions but has typically focused on the design of either the prize profile or the contest success function.

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https://www.view.sdu.edu.cn/info/1020/171889.htm