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Heterogeneity, Tournaments, and Hierarchies


  • Bhattacharya, Sudipto
  • Guasch, J Luis


Tournament contracts are characterized that simultaneously elicit first-best efficient effort levels and self -selection of risk-neutral heterogeneous workers into ability-specific contracts. Comparisons across self-selected ability types are shown to be sometimes necessary to attain efficiency. Rationales are explored for not commonly observing such contracts in hierarchical organizations. Copyright 1988 by University of Chicago Press.

Suggested Citation

  • Bhattacharya, Sudipto & Guasch, J Luis, 1988. "Heterogeneity, Tournaments, and Hierarchies," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 867-881, August.
  • Handle: RePEc:ucp:jpolec:v:96:y:1988:i:4:p:867-81

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    References listed on IDEAS

    1. Tjalling C. Koopmans, 1963. "On the Concept of Optimal Economic Growth," Cowles Foundation Discussion Papers 163, Cowles Foundation for Research in Economics, Yale University.
    2. S. Clemhout & H. Y. Wan, 1970. "Learning-by-Doing and Infant Industry Protection," Review of Economic Studies, Oxford University Press, vol. 37(1), pages 33-56.
    3. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132-132.
    4. Kenneth J. Arrow, 1962. "The Economic Implications of Learning by Doing," Review of Economic Studies, Oxford University Press, vol. 29(3), pages 155-173.
    5. Peter A. Diamond, 1965. "Disembodied Technical Change in a Two-Sector Model," Review of Economic Studies, Oxford University Press, vol. 32(2), pages 161-168.
    6. Judd, Kenneth L, 1985. "On the Performance of Patents," Econometrica, Econometric Society, vol. 53(3), pages 567-585, May.
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