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Splitting Leagues

  • Matthias Kräkel

    ()

Splitting leagues or tournaments seems to be puzzling when agents are homogeneous and splitting leads to a negative competition effect. However, it can be shown that the principal can nevertheless benefit from splitting. First, splitting can be used as a divide-and-rule strategy by the principal to create additional incentives when collusion among the agents is possible. Second, splitting leagues gives the principal the opportunity to introduce promotions and relegations between nested tournaments (i.e., tournaments that are intertemporally linked), which also enhances incentives.

(This abstract was borrowed from another version of this item.)

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File URL: http://hdl.handle.net/10.1007/s00712-006-0184-8
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Article provided by Springer in its journal Journal of Economics.

Volume (Year): 88 (2006)
Issue (Month): 1 (June)
Pages: 21-48

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Handle: RePEc:kap:jeczfn:v:88:y:2006:i:1:p:21-48
Contact details of provider: Web page: http://www.springerlink.com/link.asp?id=108909

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  1. Green, Jerry & Stokey, Nancy, 1983. "A Comparison of Tournaments and Contracts," Scholarly Articles 3203644, Harvard University Department of Economics.
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