Abstract

Contests are an important mechanism for eliciting effort in a multi-agent setting. In this paper we introduce and analyze the benefit in two enhancers to contest design within the framework of simple contests: (a) changing the execution of the contest from parallel to sequential; and (b) adding some ambiguity to the way performance is measured. While intuitively such interventions may seem to hinder participation and performance, we show that for a large class of contest settings they actually improve the expected profit of the contest organizer. The paper presents a formal game-theoretic analysis of the different enhanced mechanisms, enabling market designers and contest organizers the means for extracting the equilibrium in each in order to properly use the methods in the contests they run.

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