Fu, Qiang and Lu, Jingfeng (2006): The beauty of "bigness" in contest design: merging or splitting?
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This paper studies in a multiple-winner contest setting how the total efforts may vary between a grand contest and a set of subcontests. We first show that the rent-dissipation rate increases when the numbers of contestants and prizes are "scaled up". In other words, the total efforts of a contest exhibit a striking "increasing return to scale" property: when the numbers of contestants and prizes scale up proportionally, the total efforts of the contest increase more than proportionally. Thus, the total efforts must increase when a set of identical subcontests are merged into a grand contest. Equivalently, the total efforts decrease when a grand contest is evenly divided. We further allow the grand contest to be split into uneven subcontests. We show that under a mild and plausible condition (regular contest technology), the grand contest generates more efforts as compared to any split contests.
|Item Type:||MPRA Paper|
|Original Title:||The beauty of "bigness" in contest design: merging or splitting?|
|Keywords:||Contests; Multiple-winners; Efforts; Size; Replication|
|Subjects:||D - Microeconomics > D7 - Analysis of Collective Decision-Making
C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory
|Depositing User:||Jingfeng Lu|
|Date Deposited:||28. Nov 2006|
|Last Modified:||16. Feb 2013 19:50|