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Winner’s Optimal Reimbursement in Contest
Joint Authors
Source
Discrete Dynamics in Nature and Society
Issue
Vol. 2019, Issue 2019 (31 Dec. 2019), pp.1-5, 5 p.
Publisher
Hindawi Publishing Corporation
Publication Date
2019-11-26
Country of Publication
Egypt
No. of Pages
5
Main Subjects
Abstract EN
This paper explores a designer-optimal reimbursement scheme in all-pay auctions with winner’s reimbursement.
Assuming the reimbursement is a linear function of the cost of effort, we obtain analytical solutions for the contestants’ symmetrical equilibrium effort and the contest organizer’s expected revenue.
We show that if the effort cost function is concave, the optimal reimbursement scheme is to return the full cost to the winner.
On the contrary, if the effort cost function is convex, the optimal reimbursement scheme is not to compensate the winner.
Moreover, we find that the organizer’s expected revenue may increase or decrease as the number of contestants increases when the winner is fully reimbursed.
American Psychological Association (APA)
Liu, Yong& Dong, Shaozeng. 2019. Winner’s Optimal Reimbursement in Contest. Discrete Dynamics in Nature and Society،Vol. 2019, no. 2019, pp.1-5.
https://search.emarefa.net/detail/BIM-1146642
Modern Language Association (MLA)
Liu, Yong& Dong, Shaozeng. Winner’s Optimal Reimbursement in Contest. Discrete Dynamics in Nature and Society No. 2019 (2019), pp.1-5.
https://search.emarefa.net/detail/BIM-1146642
American Medical Association (AMA)
Liu, Yong& Dong, Shaozeng. Winner’s Optimal Reimbursement in Contest. Discrete Dynamics in Nature and Society. 2019. Vol. 2019, no. 2019, pp.1-5.
https://search.emarefa.net/detail/BIM-1146642
Data Type
Journal Articles
Language
English
Notes
Includes bibliographical references
Record ID
BIM-1146642