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We study career choice when competition for promotion is a contest. A more meritocratic profession always succeeds in attracting the highest ability types, whereas a profession with superior promotion bene…ts attracts high types only if the hazard rate of the noise in performance evaluation is strictly increasing. Raising promotion opportunities produces no(More)
We analyze a dynamic contest between two players who compete for a prize over a fixed number of stages. The player who is ahead at the end wins regardless of the history of the game. We find that if contestants are symmetric, their efforts will always be the same in the last stage of the contest. For all stages except the first and last equilibrium effort(More)
Fear of failure can dominate the choices of individuals. We model its role in the decision to become an entrepreneur and subsequent investments made in pursuit of success using the framework of loss aversion. We show that when the threshold for success is su¢ ciently high, fear of failure motivates additional sacri…ces by entrepreneurs. When the threshold(More)
Web sites invest significant resources in trying to influence their visibility among online search results. In addition to paying for sponsored links, they invest in methods known as search engine optimization (SEO). We study the economic incentives of Web sites to invest in SEO and its implications on visitor satisfaction and welfare. Our focus is on(More)
We study entrepreneurship in a setting where identical, loss-averse individuals choose between a risky entrepreneurial path and a safe outside option. The combination of e¤ort and luck determine the single winner of the entrepreneurship market. We obtain a closed form solution to equilibrium entry and e¤ort decisions. The novel implications of the model(More)
We study self-selection into contests among a large population of heterogeneous agents. We show that entry into the “richer” contest (in terms of show-up fees, number or value of prizes) is non-monotone in ability. Entry into the more meritocratic (i.e., discriminatory) contest exhibits two interior extrema. Other testable predictions of our model are: 1)(More)
We study relative performance schemes in light of social preferences. To the extent players are other regarding, they internalize the negative externality they impose on other players by exerting lower e¤ort. Thus, players with other regarding preferences are more likely to initiate and sustain collusive behavior, as traditionally de…ned. We …nd this is(More)
This paper extends the axiomatic characterization of contest success functions of Skaperdas (1996) and Clark and Riis (1998) to contests between groups. Eine "contest success function" beschreibt, wie in einem Wettkampf die Gewinnwahrscheinlichkeiten von den Einsätzen der Beteiligten abhängen. Dieser Aufsatz verallgemeinert die auf Skaperdas (1996) und(More)
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