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U-Type versus J-Type Tournaments

  • Matthias Kräkel

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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Article provided by Mohr Siebeck, Tübingen in its journal Journal of Institutional and Theoretical Economics.

Volume (Year): 158 (2002)
Issue (Month): 4 (December)
Pages: 614-

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Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200212)158:4_614:uvjt_2.0.tx_2-n
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  16. Arye L. Hillman & John G. Riley, 1987. "Politically Contestable Rents and Transfers," UCLA Economics Working Papers 452, UCLA Department of Economics.
  17. Krakel, Matthias, 2000. "Relative deprivation in rank-order tournaments," Labour Economics, Elsevier, vol. 7(4), pages 385-407, July.
  18. George Baker & Michael Gibbs & Bengt Holmstrom, 1994. "The Wage Policy of a Firm," The Quarterly Journal of Economics, Oxford University Press, vol. 109(4), pages 921-955.
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