Conferences at Department of Economics, University of Toronto, Canadian Economic Theory Conference 2017

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Incentives in team contests

Nicolas Sahuguet*, Benoit Crutzen, Sabine Flamand

Last modified: 2017-04-18

Abstract


 

We study a contest between two teams that compete for multiple indivisible prizes. Team effort is determined as a function of Individual team members efforts. The allocation of prizes among teams is then determined through a Tullock contest function. The foucs of the paper is to study how intra-party prize allocation rules provide incentives to team mebers to exerrt effort. In particular, we study an egalitarian allocation rule that treats all memebers equally ex post by giving them an equal chance to receive a prixe, and a list allocation rule that deicdes ex ante which members will receive a prize. We show that the convexity of the cost function and complementarity of indivudual efforts determine which system leads to most of effort and thus would be chosen by the teams.