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Yizhaq Minchuk, Baruch Keren and Yossi Hadad
 
''Return on Investment in Contest''
( 2018, Vol. 38 No.4 )
 
 
This paper considers a contest with one organizer and two (or more) contestants that compete to win a prize that is set by the organizer (the winner takes all). In the first stage, the organizer determines the amount of money he needs to borrow in order to establish the prize of the contest. In the second stage, each contestant determines his efforts in the contest. The contest prize is determined according to the abilities of all the contestants and the cost of the loan. It is shown that if the organizer borrows the optimal amount of money for the prize, in some situations this setup can yield 100% return on investment (ROI).
 
 
Keywords: Contest, Strategy, Return on investment
JEL: D7 - Analysis of Collective Decision-Making: General
E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment: General (includes Measurement and Data)
 
Manuscript Received : Jul 04 2018 Manuscript Accepted : Nov 06 2018

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