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U-type versus J-type tournaments

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  • Matthias Kräkel

Abstract

In practice, two types of tournaments can be distinguished - U-type and J-type tournaments. In U-type tournaments, workers receive prizes that have been fixed in advance. In J-type tournaments, the employer fixes an aggregate wage bill in advance, which is then shared among the workers according to their relative performance. The results of the paper show that the outcomes of the two tournament types substantially differ. Especially, an employer will prefer J-type to U-type tournaments if the number of workers is large, whereas the opposite holds for small numbers of workers.

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Bibliographic Info

Paper provided by University of Bonn, Germany in its series Bonn Econ Discussion Papers with number bgse34_2001.

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Length: 60
Date of creation: Nov 2001
Date of revision:
Handle: RePEc:bon:bonedp:bgse34_2001

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Postal: Bonn Graduate School of Economics, University of Bonn, Adenauerallee 24 - 26, 53113 Bonn, Germany
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Web page: http://www.bgse.uni-bonn.de

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Keywords: collusion; human capital; relative deprivation; tournaments;

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  1. Baker, George & Gibbs, Michael & Holmstrom, Bengt, 1994. "The Wage Policy of a Firm," The Quarterly Journal of Economics, MIT Press, vol. 109(4), pages 921-55, November.
  2. Baye, M.R. & Kovenock, D. & De Varies, C.G., 1990. "The All-Pay Auction With Complete Information," Papers 9051, Tilburg - Center for Economic Research.
  3. Macleod, W.B. & Kanemoto, Y., 1990. "Firm Reputation And Self-Enforcing Labour Contracts," Cahiers de recherche 9026, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
  4. Malcomson, James M, 1986. "Rank-Order Contracts for a Principal with Many Agents," Review of Economic Studies, Wiley Blackwell, vol. 53(5), pages 807-17, October.
  5. Dixit, Avinash K, 1987. "Strategic Behavior in Contests," American Economic Review, American Economic Association, vol. 77(5), pages 891-98, December.
  6. Malcomson, James M, 1984. "Work Incentives, Hierarchy, and Internal Labor Markets," Journal of Political Economy, University of Chicago Press, vol. 92(3), pages 486-507, June.
  7. Bernheim, B. Douglas & Peleg, Bezalel & Whinston, Michael D., 1987. "Coalition-Proof Nash Equilibria I. Concepts," Journal of Economic Theory, Elsevier, vol. 42(1), pages 1-12, June.
  8. Baker, George & Gibbs, Michael & Holmstrom, Bengt, 1994. "The Internal Economics of the Firm: Evidence from Personnel Data," The Quarterly Journal of Economics, MIT Press, vol. 109(4), pages 881-919, November.
  9. Edward P. Lazear & Sherwin Rosen, 1979. "Rank-Order Tournaments as Optimum Labor Contracts," NBER Working Papers 0401, National Bureau of Economic Research, Inc.
  10. Stark, Oded, 1990. "A Relative Deprivation Approach to Performance Incentives in Career Games and Other Contests," Kyklos, Wiley Blackwell, vol. 43(2), pages 211-27.
  11. Kanemoto, Y. & Macleod, B., 1989. "Optimal Labor Contracts With Non-Contractible Human Capital," UFAE and IAE Working Papers 116-89, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  12. Arye L. Hillman & John G. Riley, 1989. "Politically Contestable Rents And Transfers," Economics and Politics, Wiley Blackwell, vol. 1(1), pages 17-39, 03.
  13. Krakel, Matthias, 2000. "Relative deprivation in rank-order tournaments," Labour Economics, Elsevier, vol. 7(4), pages 385-407, July.
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Cited by:
  1. Matthias Kräkel, 2006. "Zur Reform der Professorenbesoldung in Deutschland," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 7(1), pages 105-126, 02.

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