Optimal Price of Entry into a Competition Articles uri icon

publication date

  • January 2021

start page

  • 280

end page

  • 286


  • 1


  • 59

International Standard Serial Number (ISSN)

  • 0095-2583

Electronic International Standard Serial Number (EISSN)

  • 1465-7295


  • A continuum of contestants are choosing whether to enter a competition. Each contestant has a type, and of those who enter, the ones with highest types receive prizes. A profit‐maximizing firm controls entry, and charges a price for it. I show that an increase in the value of each prize leads the firm to raise the price while keeping the intensity of entry fixed. Conversely, when the mass of prizes increases, the firm initially keeps the price constant while allowing entry to increase; and later—raises the price.