Dividing the Spoils in Team Contests

2026-05-24

AI Summary

This study addresses the optimal allocation of collective rewards in heterogeneous team contests. Focusing on a setting where two opposing managers simultaneously distribute bonuses among their respective heterogeneous team members to maximize their probability of winning, the paper develops a multi-battlefield majority-rule contest model. By integrating game-theoretic and mechanism design approaches, it establishes an equilibrium analysis framework. The analysis reveals a unique pure-strategy Nash equilibrium in which both managers employ identical relative allocation rules. Remarkably, this equilibrium allocation depends solely on each battlefield’s discriminative power, symmetry, and pivotality, and is independent of individual members’ intrinsic values or costs, thereby uncovering a universal principle in the design of team incentive mechanisms.

Abstract

Teams frequently compete on multiple fronts: political parties contest districts for majority control, contractors field specialized units to win procurement contracts, and squads play match by match for titles. Although the prize accrues collectively to the winning team, individual incentives depend on how it is divided internally. We study a majoritarian team contest in which two rival managers simultaneously divide their teams' prizes among heterogeneous members. The contest admits a unique pure-strategy equilibrium: both managers choose identical relative allocations -- regardless of heterogeneity in winning values or player costs -- with each battle's share proportional to its discriminatory power, symmetry, and pivotality.

Problem

• team contests
• prize allocation
• incentives
• heterogeneous agents
• multi-battle competition

Innovation

• team contest
• prize allocation
• pure-strategy equilibrium
• heterogeneous agents
• multi-battle competition