This paper proposes a new approach of fighting collusion in tournaments which sheds light on the principle of divide and conquer: the principal can benefit from manipulating information revelation, by which he brings asymmetric information between the agents and thus creates a distortion of efficiency in the coalition. We employ a simple tournament setting where, due to perfect collusion, the efficient effort levels are impossible to be implemented through simple mechanisms. We propose a sophisticated mechanism with a biased promotion rule that allows the principal to manipulate the revelation of information and make asymmetric information between the agents, which brings trade-offs between rent-extraction and distortion of efficiency into the coalition. We show that, it is possible to implement efficient effort levels under the sophisticated mechanism. JEL Classification: C72, D82
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
872.
Find related papers by JEL classification: C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information
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