The quasi-sorting equilibrium and incentive effects in parallel contests with multiple types of players

Abstract

We study a model of two parallel contests asymmetric in the prize with multiple types of risk-neutral players. Disclosing or hiding the realized number of players in any contest is shown to be irrelevant. We observe a quasi-sorting equilibrium wherein the most competitive players tend to enter the larger contest, while all the less competitive players equally tend to enter the smaller contest. The most competitive players bid harder in the larger contest than in the smaller contest while the players of any non-top type bid equally hard across contests. The player’s effort increases in ability in each contest.