Optimal Contest Design When Policing Damaging Behavior

Social Loss Aversion and Optimal Contest Design

When designing a contest to motivate effort by salespeople, service employees, franchisees or product development teams, one of the key questions faced by managers is: What should be the optimal proportion of winners and losers? Prevailing marketing theory predicts that the proportion of winners in a contest should always be lower than the proportion of losers. Not only has this theory not been...

Prize and Punishment: Optimal Contest Design with Incomplete Information∗

This paper studies the optimal contest design problem when the abilities of the risk neutral contestants are independent private information. The contest designer has a fixed prize budget to elicit efforts from the contestants. We consider all possible mechanisms that allocate prizes and punishments (negative prizes) across the contestants. We find that an optimal contest mechanism does not exi...

Policing and group cohesion when resources vary

The transition from competing individuals to cooperative groups has occurred several times in evolutionary history. The puzzle is why selfish individuals did not subvert cohesive group behaviour by taking resources without contributing to the group’s overall success. Kin selection and reciprocal altruism are the two standard explanations for group cohesion. But many groups have evolved into coo...

Contest Design: An Experimental Investigation

This paper experimentally compares the performance of four simultaneous lottery contests: a grand contest, two multiple prize settings (equal and unequal prizes), and a contest which consists of two subcontests. Consistent with the theory, the grand contest generates the highest effort levels among all simultaneous contests. In multi-prize settings, equal prizes produce lower efforts than unequ...

Nios II Embedded Processor Design Contest