Strategic Choice of Variability in Multiround Contests and Contests with Handicaps (Revision 1 )

Variability can be an important strategic variable in a contest. The authors study optimal strategies involving choice of variability in contests with fixed and probabilistic targets, one-round and multiround contests, contests with and without handicaps, and situations where one contestant can modify variability as well as those in which all contestants have this opportunity. A contestant should maximize variability in a weak position (low mean, high handicap, or low previous performance) and minimize variability in a strong position. In some cases, only these extremes should be used. In other cases, intermediate levels of variability are optimal when the contestant's position is neither too weak nor too strong.