Optimal Price of Entry into a Competition

Ginzburg, Boris (2019): Optimal Price of Entry into a Competition.

Abstract

A continuum of agents are choosing whether to enter a competition. Entry is controlled by a firm that charges a price for it. The mass of agents is uncertain. I analyse how the distribution of the mass of agents determines the equilibrium price and the intensity of entry. A shift of the distribution towards more mass initially induces a reduction of price, and later – a reduction in entry.

• Item Type: MPRA Paper
• Language: English
• Keywords: contests, entry, university admission tests
• Subjects: C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C72 - Noncooperative Games; D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information ; Mechanism Design

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