Optimal effort incentives in dynamic tournaments

B-Tier
Journal: Games and Economic Behavior
Year: 2017
Volume: 103
Issue: C
Pages: 199-224

Authors (2)

Klein, Arnd Heinrich (not in RePEc) Schmutzler, Armin (Universität Zürich)

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

This paper analyzes two-stage rank-order tournaments. To influence efforts in the two periods, a principal can use the intertemporal prize structure and the weight of first-period performance in the second-period prize. These two instruments implement different sets of effort vectors. We characterize the optimal combination of prizes and weights as a function of parameters. For large parameter regions, the principal should only give a second-period prize, but use positive first-period performance weights. This holds no matter whether efforts in different periods are perfect or imperfect substitutes and whether the principal gives feedback on performance or not. We also generalize existing results on whether giving feedback is beneficial for the principal.

Technical Details

RePEc Handle
repec:eee:gamebe:v:103:y:2017:i:c:p:199-224
Journal Field
Theory
Author Count
2
Added to Database
2026-01-29