A model of a team contest, with an application to incentives under list proportional representation

Abstract

We develop a model of a team contest for multiple, indivisible prizes. Team members exert costly effort to improve their team's success. We analyze two intrateam allocation rules. Under a list rule, prizes are allocated according to a predetermined list. Under an egalitarian rule, prizes are allocated according to a fair lottery. We show that which allocation rule maximizes team success depends on the degree of complementarity between members' efforts and the convexity of the individual cost of effort function. We then apply the model to the context of elections under proportional representation with both open and closed lists. We derive conditions under which closed lists generate stronger incentives than open lists. Our results offer a rationale for the lack of evidence on the negative incentive effects of closed lists.