How to divide prize money?
November 15, 2011 11:26 PM Subscribe
How should prize money be divided in order to generate the most high-quality submissions to a contest?
posted by nnevvinn to Work & Money (15 answers total) 1 user marked this as a favorite
Suppose you are putting on an essay contest, and your goal is to generate the most good essays as possible. Second, suppose there is some test to determine whether an essay is good or not, and that when you test 1000 school exam essays from the same pool of contestants, 50 pass.
You are given a chunk of money to give away as a prize, and told you can divide it however you like: One big prize, many equally-sized small prizes, 1st 2nd 3rd split, and so on. How do you decide to split it up to maximize the number of good essays? Any good essay is worth as much as any other good essay, and any bad essay is worth nothing.
Any parts of the problem that aren't specified (for example, how the probability of any single essay writer producing a good essay varies with the overall amount of prize money), are left up to you to assume, and should be stated.
(This is a simplified description of a real-world contest that I'm putting on for work and having trouble thinking about. Thanks!)