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Preemptive Behavior in Sequential-Move Tournaments with Heterogeneous Agents

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  • Jost, Peter-Jürgen
  • Kräkel, Matthias

Abstract

Rank-order tournaments are usually modeled simultaneously. However, real tournaments are often sequential. We show that agents’ strategic behavior in sequential-move tournaments significantly differ from the one in simultaneous-move tournaments: In a sequential-move tournament with heterogeneous agents, there may be either a first-mover or a second-mover advantage. Under certain conditions the first acting agent chooses a preemptively high effort so that the following agent gives up. The principal is able to prevent preemptive behavior in equilibrium, but he will not implement first-best efforts although the agents are risk neutral.

Suggested Citation

  • Jost, Peter-Jürgen & Kräkel, Matthias, 2004. "Preemptive Behavior in Sequential-Move Tournaments with Heterogeneous Agents," Bonn Econ Discussion Papers 21/2004, University of Bonn, Bonn Graduate School of Economics (BGSE).
    • Handle: RePEc:zbw:bonedp:212004
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    References listed on IDEAS

    as
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    Cited by:

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    2. Timothy Mathews & Tim Blumentritt, 2015. "A sequential choice model of family business succession," Small Business Economics, Springer, vol. 45(1), pages 15-37, June.
    3. Ricardo Manuel Santos, 2023. "Effects of psychological pressure on first‐mover advantage in competitive environments: Evidence from penalty shootouts," Contemporary Economic Policy, Western Economic Association International, vol. 41(2), pages 354-369, April.
    4. Brian Hill, 2014. "The Heat Is On," Journal of Sports Economics, , vol. 15(4), pages 315-337, August.
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    6. Jost, Peter-J. & Kräkel, Matthias, 2008. "Human capital investments in asymmetric corporate tournaments," Journal of Economics and Business, Elsevier, vol. 60(4), pages 312-331.

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    More about this item

    Keywords

    preemption; tournaments;

    JEL classification:

    • M5 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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