Incentives in lottery contests with draws

We investigate the incentive consequences of introducing the possibility of draws into lottery contests. Equilibrium total effort unambiguously decreases when draws are introduced, whereas the equilibrium expected winner’s effort increases when the contestants’ valuations of the prize become sufficiently dispersed. •A private value lottery contest model with draws is considered.•Draws increase (decrease) the strong (weak) contestant’s effort incentive.•Total effort is reduced after the introduction of a draw.•Expected winner’s effort can be higher if types are sufficiently dispersed.