We study competition among contests in a general model that allows for an arbitrary and heterogeneous space of contest design and symmetric contestants. The goal of the contest designers is to maximize the contestants' sum of efforts. Our main result shows that optimal contests in the monopolistic setting (i.e., those that maximize the sum of efforts in a model with a single contest) form an equilibrium in the model with competition among contests. Under a very natural assumption these contests are in fact dominant, and the equilibria that they form are unique. Moreover, equilibria with the optimal contests are Pareto-optimal even in cases where other equilibria emerge. In many natural cases, they also maximize the social welfare.
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Genet Alliance, 4301 Connecticut Ave,NW Suite 404, Washington, DC 20008 USAGenet Alliance, 4301 Connecticut Ave,NW Suite 404, Washington, DC 20008 USA
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Swedish Inst Int Affairs, Box 27035, S-10251 Stockholm, Sweden
Cent Asia Caucasus Inst, Silk Rd Studies Program, Stockholm, SwedenSwedish Inst Int Affairs, Box 27035, S-10251 Stockholm, Sweden