A Note on the Optimal Advantage in Sequential Contests

This paper develops a two-period model of sequential contests. Players’winning incentives depend not only on a given reward but also on a first-period winner’s relative advantage in a subsequent competition. Then the total efforts can be varying depending on whether marginal effort rises or falls in response to an increase in prize. This explains when a contest designer may award a favor, or impose disfavor, to the first-period winner in order to maximize contestants’ effort levels over two periods.