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Fatter or fitter? On rewarding and training in a contest

Permanent link
https://hdl.handle.net/10037/23627
DOI
https://doi.org/10.1111/ecin.13021
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Date
2021-07-23
Type
Journal article
Tidsskriftartikkel
Peer reviewed

Author
Clark, Derek John; Nilssen, Tore
Abstract
Competition between heterogeneous participants leads to low-effort provision in contests. A principal can divide her fixed budget between skill-enhancing training and the contest prize. Training can reduce heterogeneity, increasing effort. It also reduces the contest prize, making effort fall. We set up an incomplete-information contest with heterogeneous players and show how this trade-off is related to the size of the budget of an effort-maximizing principal. A selection problem arises implying a cost associated with a win by the inferior player. The principal has a larger incentive to train the laggard, reducing the prize on offer.
Publisher
Wiley
Citation
Clark, Nilssen. Fatter or fitter? On rewarding and training in a contest. Economic Inquiry. 2021
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  • Artikler, rapporter og annet (Handelshøgskolen) [635]
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