{"title":"Multiple prizes in tournaments with career concerns","authors":"Alvaro J. Name Correa , Huseyin Yildirim","doi":"10.1016/j.jet.2023.105778","DOIUrl":null,"url":null,"abstract":"<div><p>We introduce career concerns into rank-order tournaments and offer a novel explanation for the pervasiveness of multiple prizes. We argue that career-concerned individuals, already facing market pressure to perform, will be reluctant to participate in winner-take-all competitions. To entice them and maximize performance, the organizer promises a softer competition through multiple prizes. We show that the minimum number of prizes is single-peaked in the population's talent variance and increasing in publicly disclosed ranks. We also examine entry fees, talent pre-screening, and prize budget as design tools for tournaments, along with prize allocation.</p></div>","PeriodicalId":48393,"journal":{"name":"Journal of Economic Theory","volume":null,"pages":null},"PeriodicalIF":1.4000,"publicationDate":"2023-12-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Economic Theory","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0022053123001746","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
We introduce career concerns into rank-order tournaments and offer a novel explanation for the pervasiveness of multiple prizes. We argue that career-concerned individuals, already facing market pressure to perform, will be reluctant to participate in winner-take-all competitions. To entice them and maximize performance, the organizer promises a softer competition through multiple prizes. We show that the minimum number of prizes is single-peaked in the population's talent variance and increasing in publicly disclosed ranks. We also examine entry fees, talent pre-screening, and prize budget as design tools for tournaments, along with prize allocation.
期刊介绍:
The Journal of Economic Theory publishes original research on economic theory and emphasizes the theoretical analysis of economic models, including the study of related mathematical techniques. JET is the leading journal in economic theory. It is also one of nine core journals in all of economics. Among these journals, the Journal of Economic Theory ranks fourth in impact-adjusted citations.