Scandinavian Working Papers in Economics

SSE Working Paper Series in Economics,
Stockholm School of Economics

No 2017:2: Self-Allocation in Contests

Axel Bernergård () and Karl Wärneryd ()
Additional contact information
Axel Bernergård: Department of Social Sciences, Postal: Södertörn University, SE–141 89 Huddinge, Sweden
Karl Wärneryd: Dept. of Economics, Postal: Stockholm School of Economics, P.O. Box 6501, SE-113 83 Stockholm, Sweden

Abstract: We consider contestants who must choose exactly one contest, out of several, to participate in. We show that when the contest technology is of a certain type, or when the number of contestants is large, a self-allocation equilibrium, i.e., one where no contestant would wish to change his choice of contest, results in the allocation of players to contests that maximizes aggregate equilibrium effort. For a class of oligopoly models that are equivalent to contests, this implies output maximization.

Keywords: Contests; self-allocation; effort maximization; quantity competition.

JEL-codes: C72; D43; D44; D72; D74; L13

20 pages, August 27, 2017

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