UiT School of Business and Economics Working Papers in Economics 2020-09-11T15:17:03+02:00 Derek J. Clark Open Journal Systems <p>A series for non peer-reviewed working papers written by members of the Centre for Economic Research at the UiT School of Business and Economics.</p> Competitive Balance: Information Disclosure and Discrimination in an Asymmetric Contest 2020-09-11T15:17:03+02:00 Derek Clark Tapas Kundu <p>We study a design problem for an effort-maximizing principal in a two-player contest with two dimensions of asymmetry. Players have different skill levels and an information gap exists, as only one player knows the skill difference. The principal has two policy instruments to redress the lack of competitive balance due to asymmetry; she can commit to an information-revealing mechanism, and she can discriminate one of the players by biasing his effort. We characterize the optimal level of discrimination to maximize aggregate effort, showing how this is in turn inextricably linked to the choice of information revelation. Applications are found in newcomer-incumbent situations in an internal labor market, sales-force management, and research contests.</p> 2020-09-11T00:00:00+02:00 Copyright (c) 2020 Derek Clark; Tapas Kundu