We study contests where, subject only to a capacity constraint on mean performance, contestants compete for identical prizes by choosing random performance levels. The capacity constraint combined with the rank-contingent rewards makes winsmall/lose-big strategies optimal. Equilibrium strategies...

We study contests in which contestants are homogeneous and have convex effort costs. Increasing contest competitiveness, by making prizes more unequal, scaling up the competition, or adding new contestants, always discourages effort. These results have significant implications: although often...