Toward market design for facilitating continuous participation

This paper focuses market design by considering task allocation processes as multi-round contests. So far, contest design has been studied by formalizing the problem as an all-pay auction. These studies, however, fail to take into account the intrinsic nature of the markets, i.e., a fact that participants sequentially enter the market, i.e., incumbent agents and new entrant agents exist. This brings a new design problem that how to balance facilitating the entry of new entrants and strengthening the retention of incumbents. To realize the thick market, we examine the effects of value distribution on the tasks and the carryover of the efforts invested in the past. To tackle this problem, we build a model that multi-period contests are held, and new entrant agents appear in each period, and then clarify the equilibrium strategy how much effort participanting agents should invest. Furthermore, by employing simulation, we clarify what contest design can maximize the number of participants or the amount of effort.