Meritocratic Prize Distribution via Nash-Antifragil Mechanism

This paper introduces a novel incentive distribution mechanism rooted in game theory, leveraging a non-collusive Nash equilibrium and the concept of antifragility. Participants are assessed on multiple objective criteria by a single evaluator, and only those who exceed a minimum score threshold become eligible for a share of a fixed prize pool. The rewards are allocated proportionally among these top performers, creating strong incentives for excellence while naturally discouraging underperformance. The mechanism is simple to implement, resistent to manipulation, and becomes more rewarding in the presence of poor performers. We present a full mathematical formalization, analyze key theoretical properties including meritocracy and Pareto-efficiency, and support our findings with a simulation on real-world-like data. The mechanism has also been successfully applied in a private company in Paraguay over a two-year period to reward approximately 70 employees.