Citation:
Eden, M. . (2006). Optimal Ties in Contests. Discussion Papers. presented at the 9. Retrieved from /files/dp430.pdf
Abstract:
I analyze a mechanism design of a tournament in which the principal can strategically enhance the probability of a tie. The principal decides on a "tie distance" and announces a rule according to which a tie is declared if the difference between the two contestants' performances is within the tie distance. I show that the contestants' equilibrium efforts do not depend on the prizes awarded in case of a tie. I find that there are cases in which the optimal mechanism has a positive tie distance.