Self-selection Into Contests∗

We study self-selection into contests among a large population of heterogeneous agents. We show that entry into the “richer” contest (in terms of show-up fees, number or value of prizes) is non-monotone in ability. Entry into the more meritocratic (i.e., discriminatory) contest exhibits two interior extrema. Other testable predictions of our model are: 1) All else equal, the more meritocratic contest is “exclusive,” i.e., it attracts only a minority of the population; 2) Agents of very low ability disproportionately enter the more meritocratic contest; 3) Making a contest more meritocratic, or raising the value of prizes, may lower the average ability of entrants. Offering a higher show-up fee may lower entry. [JEL Codes: J24, D44.] ∗For valuable comments and suggestions we thank Thomas Chapman, Josse Delfgaauw, Paolo Dudine, Robert Dur, Bob Gibbons, Mitchell Hoffman, Sam Ouliaris, Sander Renes, and seminar participants in Bielefeld, Cambridge, CEU Budapest, LSE, NOVA Lisbon, and Rotterdam.