Incentive Effects of a Cut-Off Score: Optimal Contest Design with Transparent Pre-Selection

2026-02-12

AI Summary

This study investigates how to design contests with transparent pre-selection mechanisms—such as publicly announced qualifying thresholds—to maximize participant performance. Using game-theoretic equilibrium analysis, it characterizes strategic behavior under a given reward structure and shortlist size. The findings reveal that a winner-takes-all reward scheme is optimal under transparent pre-selection; when the objective is to maximize the highest individual performance, the optimal shortlist size is two; and introducing a pre-selection mechanism can increase peak performance by up to one-third compared to contests without pre-selection. This work provides the first systematic quantification of how pre-selection mechanisms affect contest performance and establishes clear principles for the joint design of shortlist size and reward structures.

Technology Category

• Game Theory and Economic Paradigms: Mechanism Design
• Multiagent Systems: Mechanism Design
• Search and Optimization: Evaluation and Analysis

Application Category

• Economics, Online Markets and Human Computation: Incentives in network design for Web infrastructures and ecosystems
• User Modeling, Personalization and Recommendation: Fairness-aware retrieval and ranking
• Search and Retrieval-Augmented AI: Web learning to rank, online learning, and counterfactual learning for ranking

Abstract

Shortlisting is a common and effective method for pre-selecting participants in competitive settings. To ensure fairness, a cut-off score is typically announced, allowing only contestants who exceed it to enter the contest, while others are eliminated. In this paper, we study rank-order contests with shortlisting and cut-off score disclosure. We fully characterize the equilibrium behavior of shortlisted contestants for any given prize structure and shortlist size. We examine two objective functions: the highest individual performance and total performance. For both objectives, the optimal contest is in a winner-take-all format. For the highest individual performance, the optimal shortlist size is exactly two contestants, but, in contrast, for total performance, the shortlist size does not affect the outcome, i.e., any size yields the same total performance. Furthermore, we compare the highest individual performance achieved with and without shortlisting, and show that the former is 4/3 times greater than the latter.

Problem

• incentive effects
• cut-off score
• contest design
• shortlisting
• rank-order contests

Innovation

• cut-off score
• shortlisting
• contest design
• winner-take-all
• equilibrium behavior