Entry into Winner-Take-All and Proportional-Prize Contests
نویسندگان
چکیده
This experiment compares the performance of two contest designs. In the winner-take-all tournament, the highest performing contestant wins a prize. In the proportional-payment design, that same prize is divided among the contestants according to their share of total achievement. We find that proportional prizes elicit higher entry rates and thus more total achievement than the winner-take-all tournament. The proportional-prize contest performs better because it encourages significantly more entry among low ability contestants, without discouraging the entry of high ability contestants or limiting entrants’ performance. Proportional prizes also reduce excess entry and earnings inequality. Consistent with previous literature, we also find that men enter tournaments more often than women. JEL Classifications: C72, D72, J33
منابع مشابه
Entry into winner-take-all and proportional-prize contests: An experimental study
This experiment compares the performance of two contest designs: a standard winnertake-all tournament with a single fixed prize, and a novel proportional-payment design in which that same prize is divided among contestants by their share of total achievement. We find that proportional prizes elicit more entry and more total achievement than the winner-take-all tournament. The proportional-prize...
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