Since I am shallow, I can think of no better criteria than calculating the ROI (that’s return-on-investment in business parlance) to select a fiction contest. ROI takes in account both the cost and potential payoff. A contest with $20 entry fee with a $3000 prize might be more attractive than a free contest that offers a sample copy of a special issue of a literary magazine—unless you really, really, really liked the stories in the magazine or could foretell the future and see that that particular issue would be a collector’s item worth thousands of dollars; of course, in the latter case you would need to calculate the time value of money to see what thousands of dollars received X number of years in the future would be worth to you now.
A basic ROI calculation as applied to these contests would take the entry fee and subtract it from the prize and then divide the entry fee, resulitng in a percentage. For example, a contest with $10 entry fee and a $500 prize would have an ROI of 4900%. However, this is only the case if a win is a certainty, which of course, it is not. It is therefore necessary to make a simple adjustment by applying the probability that I will win the contest and applying the probability value to the potential prize. In the example already described, I might determine the probability to be a tenth of 1%, which would be reasonable in a contest with 1000 submissions and all submitters are of equal talent with stories that are equally appealing to the contest judges. For the calculation the prize is now only worth 50 cents. When I plug this value into the equation, the ROI is negative 95%, which means I lost 95% of my investment.
This is a good start, but I will make another trivial adjustment to my costs. In my case, I have a monstrous story that will require some work. I will need to add the time I spend on reworking the story to its cost. I will assume that an hour of time is worth $42, and it will take me an hour to rework 250 words. Developing the example contest through this indisputably sound line of reasoning would result in an increased cost of $170 ($40 per hour to rework 1000 words plus the $10 entry fee.) Now, the ROI is a negative %99.7.
The prospects for a profitable short fiction contest are beginning to look grim.