Prize Allocation in Contests with Size Effect through Prizes

Sanghack Lee; Shi Young Lee

doi:10.4236/tel.2012.22038

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Prize Allocation in Contests with Size Effect through Prizes

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DOI: 10.4236/tel.2012.22038 6,012 Downloads 8,836 Views Citations

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Sanghack Lee, Shi Young Lee

Affiliation(s)

Department of International Commerce, Kookmin University, Seoul, Korea.
Division of Business, Chung-Ang University, Ansung, Korea.

ABSTRACT

We examine prize allocation in contests in which the number of contenders affects prizes. The government allocates a fixed prize between two groups of contenders. The prize share of each group is determined endogenously through the inter-group share contest. Then, the contenders in each group respectively compete for the prize. Examining prize allocation in such contests, we obtain the following results. The contenders expend more resources when they cooperate than when they contribute non-cooperatively in the inter-group share contest. The size effect through prizes increases the prize share of the larger group. The larger group can even obtain the larger share if the size effect through prizes is sufficiently strong.

KEYWORDS

Contest; Prize Allocation; Endogenous Prize Share; Size Effect

Conflicts of Interest

The authors declare no conflicts of interest.

Cite this paper

S. Lee and S. Lee, "Prize Allocation in Contests with Size Effect through Prizes," Theoretical Economics Letters, Vol. 2 No. 2, 2012, pp. 212-215. doi: 10.4236/tel.2012.22038.

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