AbstractIn many facets of life, we often face competition with a multilayered structure in which different levels of competition take place simultaneously. In this paper, we propose a new class of tournament models, called multilayered tournaments, to capture this type of competitive environment. Among other things, we find that: (i) an increase in individual incentives, holding the level of team incentives fixed, can lower total effort as it induces inefficient allocation of effort; (ii) the optimal level of individual incentives depends on and is complementary to the level of team incentives. The analysis illuminates the essential role of economic subgroups, such as firms, in achieving some degree of cooperation in an inherently competitive environment, and provides an explanation for why high-powered incentives are more common in market arrangements than within firms.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Institute of Social and Economic Research, Osaka University in its series ISER Discussion Paper with number 0879.
Date of creation: Aug 2013
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-08-16 (All new papers)
- NEP-COM-2013-08-16 (Industrial Competition)
- NEP-HRM-2013-08-16 (Human Capital & Human Resource Management)
- NEP-MIC-2013-08-16 (Microeconomics)
- NEP-SPO-2013-08-16 (Sports & Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Richard L. Fullerton & R. Preston McAfee, 1999. "Auctioning Entry into Tournaments," Journal of Political Economy, University of Chicago Press, vol. 107(3), pages 573-605, June.
- Sutter, Matthias & Strassmair, Christina, 2009.
"Communication, cooperation and collusion in team tournaments--An experimental study,"
Games and Economic Behavior,
Elsevier, vol. 66(1), pages 506-525, May.
- Matthias Sutter & Christina Strassmair, 2007. "Communication, cooperation and collusion in team tournaments ? An experimental study," Working Papers 2007-19, Faculty of Economics and Statistics, University of Innsbruck.
- Sutter, Matthias & Strassmair, Christina, 2007. "Communication, cooperation and collusion in team tournaments - An experimental study," Discussion Papers in Economics 2016, University of Munich, Department of Economics.
- Rosen, Sherwin, 1986.
"Prizes and Incentives in Elimination Tournaments,"
American Economic Review,
American Economic Association, vol. 76(4), pages 701-15, September.
- Nalbantian, Haig R & Schotter, Andrew, 1997.
"Productivity under Group Incentives: An Experimental Study,"
American Economic Review,
American Economic Association, vol. 87(3), pages 314-41, June.
- Nalbantian, Haig & Schotter, Andrew, 1994. "Productivity Under Group Incentives: An Experimental Study," Working Papers 94-04, C.V. Starr Center for Applied Economics, New York University.
- Itoh, Hideshi, 1991. "Incentives to Help in Multi-agent Situations," Econometrica, Econometric Society, vol. 59(3), pages 611-36, May.
- Anthony M. Marino & J�n Z�bojn�k, 2004. "Internal Competition for Corporate Resources and Incentives in Teams," RAND Journal of Economics, The RAND Corporation, vol. 35(4), pages 710-727, Winter.
- Warneryd, Karl, 1998.
"Distributional conflict and jurisdictional organization,"
Journal of Public Economics,
Elsevier, vol. 69(3), pages 435-450, September.
- Wärneryd, Karl, 1997. "Distributional Conflict and Jurisdictional Organization," Working Paper Series in Economics and Finance 173, Stockholm School of Economics.
- Gurtler, Oliver, 2008. "On sabotage in collective tournaments," Journal of Mathematical Economics, Elsevier, vol. 44(3-4), pages 383-393, February.
- Shmuel Nitzan & Kaoru Ueda, 2010.
"Prize Sharing in Collective Contests,"
CESifo Working Paper Series
3212, CESifo Group Munich.
- 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 841-64, October.
- Junichiro Ishida, 2006. "Team Incentives under Relative Performance Evaluation," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 15(1), pages 187-206, 03.
- Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," Journal of Law, Economics and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
- Hodaka Morita, 2012. "Firm Dynamics and Labor Market Consequences," Journal of Law, Economics and Organization, Oxford University Press, vol. 28(2), pages 235-264.
- Nitzan, Shmuel, 1991. "Collective Rent Dissipation," Economic Journal, Royal Economic Society, vol. 101(409), pages 1522-34, November.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Fumiko Matsumoto).
If references are entirely missing, you can add them using this form.