Handicapping and Reverse Handicapping under Uncertainty in an All-Pay Auction
2010/11/30
研討會日期 : 2010-11-30
時間 : 14:30
主講人 : Professor Robert W. Ridlon, III
地點 : B110
演講者簡介 : Robert W. Ridlon, III got his Ph.D. in Business from Indiana University in 2008. He is currently serving as Assistant Professor of Marketing of Graduate School of Business at Sungkyunkwan University. His research field is in game theory, contests in game theory, contests and tournaments in marketing strategy, pricing strategies, consumer decision making, and auctions.
演講摘要 : A fundamental result of contest theory is that evenly matched contests are fought most intensely, implying that a contest designer maximizes effort from each contestant by artificially boosting the chances of the underdog. Such “handicapping” is credited with making sports contests more exciting, improving efficiency in internal labor markets, increasing effort from students competing to enter college, and raising revenues in auctions. We reexamine the handicapping problem in a two-period contest where the only information available on player ability is performance in the first period. When a contest is perfectly discriminating (i.e. an all-pay auction), the player who exerts the most effort wins, but the weaker player will not participate with some probability, resulting in lower total effort. However, we find that in the two-period contest, handicapping the loser of the first period increases total effort for all ability differences. When the objective is to increase accuracy in identifying the better player, handicapping the winner is optimal.
