We study a model that involves identity-dependent, asymmetric negative external effects. Willingness to pay, which can be computed only in equilibrium, will reflect, besides private valuations, also preemptive incentives stemming from the desire to minimize the negative externalities. We find...

We study optimal contest design in situations where the designer can reward high performance agents with positive prizes and punish low performance agents with negative prizes. We link the optimal prize structure to the curvature of distribution of abilities in the population. In particular, we...

We study an elimination tournament with heterogenous contestants whose ability is common-knowledge. Each pair-wise match is modeled as an all-pay auction. Equilibrium efforts are in mixed strategies, yielding complex dynamics: endogenous win probabilities in each match depend on other matches’...

We study contests where several privately informed agents bid for a prize. All bidders bear a cost of bidding that is an increasing function of their bids, and, moreover, bids may be capped. We show that regardless of the number of bidders, if bidders have linear or concave cost functions, then...

We study an elimination tournament with heterogenous contestants whose ability is common-knowledge. Each pair-wise match is modeled as an all-pay auction where the winner gets the right to compete at the next round. Equilibrium efforts are in mixed strategies, yielding rather complex play...

We study the optimal design of organizations under the assumption that agents in a contest care about their relative position. A principal determines the number and size of status categories in order to maximize output. We first consider the pure status case without tangible prizes. Our results...

We study the optimal design of organizations under the assumption that agents in a contest care about their relative position. A judicious definition of status categories can be used by a principal in order to influence the agents’ performance. We first consider a pure status case where...