Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/251949 
Authors: 
Year of Publication: 
2022
Series/Report no.: 
BERG Working Paper Series No. 175
Publisher: 
Bamberg University, Bamberg Economic Research Group (BERG), Bamberg
Abstract: 
I characterize the optimal accuracy level r of an unbiased Tullock contest between two players with heterogeneous prize valuations. The designer maximizes the winning probability of the strong player or the winner's expected valuation by choosing a contest with an all-pay auction equilibrium (r ≥ 2). By contrast, if she aims at maximizing the expected aggregate effort or the winner's expected effort, she will choose a contest with a pure-strategy equilibrium, and the optimal accuracy level r < 2 decreases in the players' heterogeneity. Finally, a contest designer who faces a tradeoff between selection quality and minimum (maximum) effort will never (may) chose a contest with a semi-mixed equilibrium.
Subjects: 
Tullock Contest
Heterogeneous Valuations
Accuracy
Discrimination
Optimal Design
All-Pay Auction
JEL: 
C72
D72
ISBN: 
978-3-943153-96-5
Document Type: 
Working Paper

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