Abstract
The means of contest design may include differential taxation of the prize. This paper considers all-pay auctions under complete information and establishes that, given a revenue-maximizing contest designer who faces a balanced-budget constraint, the optimal taxation scheme corresponding to an all-pay auction is appealing in two senses. First, it ensures extreme equitable final prize valuations. Second, it is effective; it yields total contestants' efforts that are larger than those obtained under almost any pure-strategy equilibrium of a Tullock-type lottery contest.
| Original language | English |
|---|---|
| Pages (from-to) | 437-464 |
| Number of pages | 28 |
| Journal | Social Choice and Welfare |
| Volume | 42 |
| Issue number | 2 |
| DOIs | |
| State | Published - Feb 2014 |
Bibliographical note
Funding Information:Financial support from the Adar Foundation of the Economics Department of Bar-Ilan University is gratefully acknowledged. We are most grateful to two anonymous referees and an Associate Editor for their most useful comments
Funding
Financial support from the Adar Foundation of the Economics Department of Bar-Ilan University is gratefully acknowledged. We are most grateful to two anonymous referees and an Associate Editor for their most useful comments
| Funders | Funder number |
|---|---|
| Adar Foundation of the Economics Department of Bar-Ilan University |