Competition among contests

Abstract

When several contests compete for the participation of a common set of players, a contest's allocation of prizes not only induces incentive effects but also participation effects. Our model predicts that an increase in the sensitivity with which contest outcomes depend on players' efforts makes flatter prize structures more attractive to participants. In equilibrium, contests that aim to maximize the number of participants will award multiple prizes if and only if this sensitivity is sufficiently high. Moreover, the prize awarded to the winner is decreasing in the contests' sensitivity. We provide empirical evidence from professional road running using race-distance as a measure of sensitivity. We show that steeper prize structures are more attractive to top-ranked runners in longer, that is, less sensitive, races. In line with our theory, longer races do in fact offer steeper prize structures. Copyright (c) 2009, RAND.

Affirmative action through extra prizes

“…Glazer and Hassin 1988;Clark and Riis 1998b;Moldovanu and Sela 2001;Szymanski and Valletti 2005;Moldovanu and Sela 2006;Azmat and Möller 2009;Fu and Lu 2009;Möller 2012), because the introduction of an extra prize establishes a specific prize structure. Our model, however, differs from this literature by allowing for some contestants to win more than one prize with a sole effort choice.…”

The Ponds Dilemma

“…Their main findingfor which they find empirical support in professional road runningis that the more discriminatory the contest, the more prizes should be offered. Unlike in our model, contestants in Azmat and M€ oller (2009) are identical in ability and the contest success function is parametric. In Azmat and M€ oller (2012), abilities are binary.…”

“…Generally, the technical literature on the ponds dilemma is of recent vintage. It includes papers by Azmat and Möller (, ), Damiano et al . (, ), Leuven et al .…”

“…They find that selection effects dominate. Azmat and M€ oller (2009) study how competing contests should be structured in order to maximise participation. Their main findingfor which they find empirical support in professional road runningis that the more discriminatory the contest, the more prizes should be offered.…”

Semi-Public Competitions

“…Related to stage 3 of my paper, Azmat and Möller (2009) [0,Z], no atoms, and expectation E(Z). All draws are i.i.d., hence,Z i ≡Z.…”