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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 differ substantially. In particular, an employer will prefer J-type to U-type tournaments if the number of workers is large, but the opposite if it is small.

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  • Matthias Kräkel, 2002. "U-Type versus J-Type Tournaments," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 158(4), pages 614-637, December.
    • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200212)158:4_614:uvjt_2.0.tx_2-n
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    Cited by:

    1. Norbert Bach & Oliver Guertler & Joachim Prinz, 2009. "Incentive Effects in Tournaments with Heterogeneous Competitors – an Analysis of the Olympic Rowing Regatta in Sydney 2000," management revue. Socio-economic Studies, Rainer Hampp Verlag, vol. 20(3), pages 239-253.
    2. Matthias Kräkel, 2006. "Splitting Leagues," Journal of Economics, Springer, vol. 88(1), pages 21-48, June.
    3. Ola Kvaløy & Trond E. Olsen, 2008. "Relative Performance Evaluation, Agent Hold-up and Firm Organization," NBER Chapters, in: Organizational Innovation and Firm Performance, pages 229-241, National Bureau of Economic Research, Inc.
    4. Gürtler, Oliver, 2006. "Job Promotion Tournaments and Imperfect Recall," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 112, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    5. Kräkel, Matthias & Irlenbusch, Bernd & Harbring, Christine & Selten, Reinhard, 2004. "Sabotage in Asymmetric Contests – An Experimental Analysis," Bonn Econ Discussion Papers 12/2004, University of Bonn, Bonn Graduate School of Economics (BGSE).
    6. Matthias Kräkel, 2006. "Zur Reform der Professorenbesoldung in Deutschland," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 7(1), pages 105-126, February.
    7. Krakel, Matthias, 2003. "U-type versus J-type tournaments as alternative solutions to the unverifiability problem," Labour Economics, Elsevier, vol. 10(3), pages 359-380, June.
    8. 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.
    9. Kräkel, Matthias, 2002. "U-type versus J-type Tournaments as Alternative Solutions to the Unverifiability Problem," Bonn Econ Discussion Papers 3/2002, University of Bonn, Bonn Graduate School of Economics (BGSE).

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    More about this item

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration
    • M5 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics

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