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Jason J Lepore, Alison Mackey and Tyson B Mackey
''Punishment versus Reward in All-pay Contests with Perfect Information''
( 2012, Vol. 32 No.4 )
We study when costly punishment induces higher expected effort than prizes in all-pay contests with perfect information. Punishment outperforms rewards if the number of players in the contest is large enough or if the principal can easily administer effective punishment. If the marginal cost of punishment is equal to the marginal cost of reward, then punishment induces more effort in all symmetric contests.
Keywords: contest, all-pay auction, punishment
Manuscript Received : Feb 22 2012 Manuscript Accepted : Nov 07 2012

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