Auctionin Entry into Tournaments

Abstract
A research tournament model with heterogeneous contestants is presented. For a large class of contests the optimal number of com- petitors is two. This insight makes designing the tournament easier and highlights the importance of selecting highly qualified contes- tants. While customary uniform-price and discriminatory-price auctions are intuitively appealing mechanisms for solving this ad- verse selection problem, in practice they generally will not be effi- cient mechanisms for selecting contestants. Instead, we propose an alternative auction format that is equally simple to implement and efficiently selects the most qualified contestants to compete, regardless of the form of contestant heterogeneity.