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The Distribution of Talent across Contests

Author

Listed:
  • Ghazala Azmat
  • Marc Möller
Abstract
Do the contests with the largest prizes attract the most able contestants? Do contestants avoid competition? In this paper we show that the distribution of abilities plays a crucial role in determining contest choice. Positive sorting exist only when the proportion of high ability contestants is sufficiently small. As this pro- portion increases, contestants shy away from competition and sorting decreases. Eventually, contests with smaller prizes attract stronger participants, i.e. there exists negative sorting. We test our theoretical predictions using a large panel data set containing contest choice over three decades. We use exogenous variation in the participation of highly able competitors to provide empirical evidence for the relationship between prizes and sorting.

Suggested Citation

  • Ghazala Azmat & Marc Möller, 2012. "The Distribution of Talent across Contests," Working Papers 600, Barcelona School of Economics.
    • Handle: RePEc:bge:wpaper:600
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    Cited by:

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    2. Amegashie, J. Atsu, 2019. "Quantity-cum-quality contests," European Journal of Political Economy, Elsevier, vol. 58(C), pages 289-297.
    3. Aleksei Chernulich & Romain Gauriot & Daehong Min, 2023. "Endogenous Tracking: Sorting and Peer Effects," Working Papers 20230084, New York University Abu Dhabi, Department of Social Science, revised Jan 2023.
    4. John Morgan & Dana Sisak & Felix Várdy, 2018. "The Ponds Dilemma," Economic Journal, Royal Economic Society, vol. 128(611), pages 1634-1682, June.
    5. Martin Grossmann, 2021. "Entry regulations and optimal prize allocation in parallel contests," Review of Economic Design, Springer;Society for Economic Design, vol. 25(4), pages 289-316, December.
    6. Aner Sela & Ishay Rabi & Chen Cohen, 2023. "An Algorithmic Analysis of Parallel Contests," Working Papers 2317, Ben-Gurion University of the Negev, Department of Economics.
    7. Deutscher, Christian & Gürtler, Marc & Gürtler, Oliver & DeVaro, Jed, 2020. "Firm choice and career success - theory and evidence," European Economic Review, Elsevier, vol. 127(C).
    8. Wang, Zhen & Vukina, Tomislav, 2017. "Sorting into Contests: Evidence from Production Contracts," ARE Working Papers 262930, North Carolina State University, Department of Agricultural and Resource Economics.
    9. Liu, Bin & Lu, Jingfeng, 2023. "Optimal orchestration of rewards and punishments in rank-order contests," Journal of Economic Theory, Elsevier, vol. 208(C).
    10. Deutscher, Christian & Neuberg, Lena & Thiem, Stefan, 2023. "Who’s afraid of the GOATs? - Shadow effects of tennis superstars," Journal of Economic Psychology, Elsevier, vol. 99(C).
    11. Aner Sela & Ishay Rabi & Chen Cohen, 2024. "Reputation in Contests," Working Papers 2409, Ben-Gurion University of the Negev, Department of Economics.
    12. Luke Boosey & Philip Brookins & Dmitry Ryvkin, 2020. "Information Disclosure in Contests with Endogenous Entry: An Experiment," Management Science, INFORMS, vol. 66(11), pages 5128-5150, November.
    13. Wei-Torng Juang & Guang-Zhen Sun & Kuo-Chih Yuan, 2020. "A model of parallel contests," International Journal of Game Theory, Springer;Game Theory Society, vol. 49(2), pages 651-672, June.

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    More about this item

    Keywords

    contests; prize structure; ability; sorting;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact

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