The optimal prize structure of symmetric Tullock contests

Paul Schweinzer; Ella Segev

doi:10.1007/s11127-011-9774-2

The optimal prize structure of symmetric Tullock contests

Paul Schweinzer, Ella Segev

Department of Industrial Engineering and Management

Ben-Gurion University of the Negev

Research output: Contribution to journal › Article › peer-review

Abstract

We show that the optimal prize structure of symmetric n-player Tullock tournaments assigns the entire prize pool to the winner, provided that a symmetric pure strategy equilibrium exists. If such an equilibrium fails to exist under the winner-take-all structure, we construct the optimal prize structure which improves existence conditions by dampening efforts. If no such optimal equilibrium exists, no symmetric pure strategy equilibrium induces positive efforts.

Original language	English
Pages (from-to)	69-82
Number of pages	14
Journal	Public Choice
Volume	153
Issue number	1-2
DOIs	https://doi.org/10.1007/s11127-011-9774-2
State	Published - 1 Oct 2012

Keywords

Incentive structures
Rent seeking
Tournaments

All Science Journal Classification (ASJC) codes

Sociology and Political Science
Economics and Econometrics

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10.1007/s11127-011-9774-2

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title = "The optimal prize structure of symmetric Tullock contests",

abstract = "We show that the optimal prize structure of symmetric n-player Tullock tournaments assigns the entire prize pool to the winner, provided that a symmetric pure strategy equilibrium exists. If such an equilibrium fails to exist under the winner-take-all structure, we construct the optimal prize structure which improves existence conditions by dampening efforts. If no such optimal equilibrium exists, no symmetric pure strategy equilibrium induces positive efforts.",

keywords = "Incentive structures, Rent seeking, Tournaments",

author = "Paul Schweinzer and Ella Segev",

note = "Funding Information: Acknowledgements Thanks for helpful comments to Alex Gershkov, Benny Moldovanu, Kai Konrad, Johannes M{\"u}nster, Tymofiy Mylovanov, the editor, and two anonymous referees. Financial support from the German Science Foundation through SFB/TR 15 is gratefully acknowledged for the period at which the first author stayed at the University of Bonn. We also appreciate the hospitality of MEDS, Northwestern University, which hosted part of our efforts.",

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PY - 2012/10/1

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N2 - We show that the optimal prize structure of symmetric n-player Tullock tournaments assigns the entire prize pool to the winner, provided that a symmetric pure strategy equilibrium exists. If such an equilibrium fails to exist under the winner-take-all structure, we construct the optimal prize structure which improves existence conditions by dampening efforts. If no such optimal equilibrium exists, no symmetric pure strategy equilibrium induces positive efforts.

AB - We show that the optimal prize structure of symmetric n-player Tullock tournaments assigns the entire prize pool to the winner, provided that a symmetric pure strategy equilibrium exists. If such an equilibrium fails to exist under the winner-take-all structure, we construct the optimal prize structure which improves existence conditions by dampening efforts. If no such optimal equilibrium exists, no symmetric pure strategy equilibrium induces positive efforts.

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KW - Tournaments

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DO - 10.1007/s11127-011-9774-2

M3 - مقالة

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JO - Public Choice

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IS - 1-2

ER -

The optimal prize structure of symmetric Tullock contests

Abstract

Keywords

All Science Journal Classification (ASJC) codes

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