Well it depends. Higher the no. of participants lower will be your stake and that obviously bounty hunters won't like it. Also in case of lower no. of participants their will be higher stake resulting in unevenly high rate of payout which obviously team would resist to pay so many would payout by changing some rules or the structure which will result in conflict.

I think fixed bounty allocation is better way, both for the bounty hunters and the team. I have tested out myself and have seen stake model bounties fail most of the time.