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Head starts in dynamic tournaments?

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  • Denter, Philipp
  • Sisak, Dana

Abstract

In promotion contests or other tournament-like situations, a principal may attach some value to the highest effort expended by an agent. We show that whenever agents interact over multiple periods, awarding a head start to one of them is optimal even with completely symmetric agents. Awarding a small head start increases maximum individual effort without decreasing aggregate effort.

Suggested Citation

  • Denter, Philipp & Sisak, Dana, 2016. "Head starts in dynamic tournaments?," Economics Letters, Elsevier, vol. 149(C), pages 94-97.
    • Handle: RePEc:eee:ecolet:v:149:y:2016:i:c:p:94-97
    DOI: 10.1016/j.econlet.2016.10.008
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    References listed on IDEAS

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    1. Lazear, Edward P & Rosen, Sherwin, 1981. "Rank-Order Tournaments as Optimum Labor Contracts," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 841-864, October.
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    Citations

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    Cited by:

    1. Czerny, Achim I. & Fosgerau, Mogens & Jost, Peter-J. & van Ommeren, Jos N., 2019. "Why pay for jobs (and not for tasks)?," Journal of Economic Behavior & Organization, Elsevier, vol. 168(C), pages 419-433.
    2. Malin Arve & Olga Chiappinelli, 2021. "The Role of Budget Constraints in Sequential Elimination Tournaments," Scandinavian Journal of Economics, Wiley Blackwell, vol. 123(4), pages 1059-1087, October.
    3. Ginzburg, Boris, 2019. "A Simple Model of Competitive Testing," MPRA Paper 99463, University Library of Munich, Germany.
    4. Noam Cohen & Guy Maor & Aner Sela, 2018. "Two-stage elimination contests with optimal head starts," Review of Economic Design, Springer;Society for Economic Design, vol. 22(3), pages 177-192, December.
    5. Drugov, Mikhail & Ryvkin, Dmitry, 2017. "Biased contests for symmetric players," Games and Economic Behavior, Elsevier, vol. 103(C), pages 116-144.
    6. Stupak, O., 2023. "Industrial cyberespionage in research and development races," Cambridge Working Papers in Economics 2337, Faculty of Economics, University of Cambridge.
    7. Klein, Arnd Heinrich & Schmutzler, Armin, 2021. "Incentives and motivation in dynamic contests," Journal of Economic Behavior & Organization, Elsevier, vol. 189(C), pages 194-216.
    8. Philipp Denter & John Morgan & Dana Sisak, 2022. "Showing Off or Laying Low? The Economics of Psych-outs," American Economic Journal: Microeconomics, American Economic Association, vol. 14(1), pages 529-580, February.
    9. Subhasish M. Chowdhury & Patricia Esteve‐González & Anwesha Mukherjee, 2023. "Heterogeneity, leveling the playing field, and affirmative action in contests," Southern Economic Journal, John Wiley & Sons, vol. 89(3), pages 924-974, January.

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    More about this item

    Keywords

    Personnel economics; Contests; Tournaments; Head start;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies

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