New publication by Cédric Wasser and Mengxi Zhang: Differential treatment and the winner's effort in contests with incomplete information

Cédric Wasser

in Games and Economic Behavior, Volume 138, March 2023, Pages 90-111

We study the design of all-pay contests when the organizer's objective is to maximize the expected winner's effort and contestants have private information about their valuations for the prize. We identify sufficient conditions for every optimal contest to involve differential treatment of ex ante symmetric contestants. Moreover, we provide a complete characterization of optimal contests when valuations are uniformly distributed. Finally, our results for the winner's effort also imply that differential treatment is even more likely to benefit the organizer when her objective is to maximize the expected highest effort.

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