BOOK: Contest Theory: Incentive Mechanisms and Ranking Methods. Milan Vojnović [606967]

BOOK: Contest Theory: Incentive Mechanisms and Ranking Methods. Milan Vojnović

Economic, social, political, and technical aspects are often described as contests where the competing
entities ( being called agents, players) can use limited resources of different nature to change the
likelihood of the winning prizes. The way prizes are awarded in order to maximize the desired goal is a
central issue within the contest theory area.

By pursuing a balanced approach to theory, research, and practice, the book Contest Theory: Incentive
Mechanisms and Ranking Methods offers a comprehensive coverage of contest theory developed in the
areas of economics, computer science and statistics. Discussing this specific aspects, this book is
primarily targeted at professional s, researchers and graduate students who wish to explore research
topics and apply contest theory results. In the same time , it is thought as a textbook both for students
and for the enthusiasts of self -study.

Contest Theory: Incentive Mechanisms and Ran king Methods is written in an easy reading style with
theoretical solid arguments, first presenting the basic concepts, subsequently going forward into more
details. The contents are very well selected. Theorems and examples are supplied with detailed proo fs.
The book is organized into ten chapters, to which is added Chapter 11 , „Appendix” . Each chapter has
a summary section and a section of exercises, allowing the readers to test their advance in the
knowledge of the issues. A short bibliographic notes section appears at the end of each chapter to
provide some of the most relevant references for further exploration. A comprehensive references
section is included at the end of the book.

The first chapter, „Introduction and Preview”, presents an intr oduction to the contest theory based on
suggestive examples from sport, economy and scientific areas and introduces the basic concepts, the
goals, and the terminology related to this subject. In Chapter 2, „Standard All -Pay Contest”, Game with
Complete Inf ormation and Game with Incomplete Information are presented. Contests that award one
or more placement prizes based on the rank of individual performance for Game with Incomplete
Information and for Game with Complete Information are explained in detail within the Chapter 3,
„Rank -Order Allocation of Prizes”. In Chapter 4, „Smooth Allocation of Prizes”, smooth allocation
mechanism is introduced; General -Logit Contest Success Functions, Proportional Allocation, Ratio –
Form Allocation, Weighted Proportional Allocation, Weighted Valuation Allocation, Optimal Prior -Free
Contest Design, Difference -Form Prize Allocation are well explained in detail.
Standard All -Pay Contests, Standard All -Pay Contests with Budgets, Proportional Allocation, Equal
Sharing Allocati on are surveyed in Chapter 5, „Simultaneous Contests ”. In Chapter 6, „Utility Sharing
and Welfare”, Utility Maximization Games, Efficient and Inefficient Production Systems, Monotone
Valid Utility Games, Social Efficiency and the Marginal Contribution Cond ition, Proportional
Allocation, Contribution Order Allocation, Equal -Share Allocation are explained. In Chapter 7
Sequential Contests are presented and thoroughly exemplified . In chapter 8, „Tournaments”, basic
concepts are introduced; Seedings for Tourna ments of Two -Player Matches and Strategic Behavior and
Production Costs are presented. Chapter 9, „Rating Systems”, focus on statistical estimation of skills
and Chapter 10, „Ranking Methods”, center on ranking of the players.

To conclude, t he Contest The ory: Incentive Mechanisms and Ranking Methods book gives the readers a
clear concept and makes the c ontest theory easy and interesting. The author strikes a perfect balance
between theory and technique. Because of its special content, I strongly recommend this book to
anyone who wants to leam the basics of contest theory.