We study the optimal design of organizations under the assumption that agents in a contest care about their relative position. A principal determines the number and size of status categories in order to maximize output. We first consider the pure status case without tangible prizes. Our results...

We study contests where several privately informed agents bid for a prize. All bidders bear a cost of bidding that is an increasing function of their bids, and, moreover, bids may be capped. We show that regardless of the number of bidders, if bidders have linear or concave cost functions, then...

We study the optimal design of organizations under the assumption that agents in a contest care about their relative position. A judicious definition of status categories can be used by a principal in order to influence the agents' performance. We first consider a pure status case where there...