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arXiv · 2605.25349

Dividing the Spoils: Strategic Prize Allocation in Team Contests

Zhonghong Kuang·Jingfeng Lu·Yiyao Zhu
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Abstract

Rival teams compete through battles and reward members only after team victory. We study how team managers allocate victory-contingent reward budgets across players to maximize their teams' winning probabilities in a majoritarian contest. Under a regularity condition on battle technologies, the allocation game has a unique pure-strategy equilibrium. Despite differences in budgets and player costs across teams and technologies across battles, both managers choose the same normalized reward schedule, a property we call reward schedule alignment. Each battle's share is proportional to discriminatory power, closeness, and pivotality. With precommitted rewards, allocations and team-winning probabilities are independent of battle order.

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Zhonghong Kuang, Jingfeng Lu, Yiyao Zhu. 2026-05-25. Dividing the Spoils: Strategic Prize Allocation in Team Contests. https://arxiv.org/abs/2605.25349

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