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Promotion Tournaments with Multiple Tasks


  • Fumi Kiyotaki


This article analyses promotion tournaments where candidates engage in multiple tasks. We consider a promotion rule where the winner of the promotion tournament is randomly selected from the best performers at each task. The promotion tournament can achieve an efficient outcome for any production uncertainty (observability) of tasks and substitutability in the effort cost when employees are risk neutral and homogeneous. The promotion decision should be based much more on the outcome in a more uncertain task. If employees are heterogeneous in their ability to undertake a task, then the outcome of an ability-dependent task should be relied upon more in the promotion decision than the outcome of a simple task.

Suggested Citation

  • Fumi Kiyotaki, 2008. "Promotion Tournaments with Multiple Tasks," Birkbeck Working Papers in Economics and Finance 0804, Birkbeck, Department of Economics, Mathematics & Statistics.
  • Handle: RePEc:bbk:bbkefp:0804

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    References listed on IDEAS

    1. Meyer, Margaret A. & Olsen, Trond E. & Torsvik, Gaute, 1996. "Limited intertemporal commitment and job design," Journal of Economic Behavior & Organization, Elsevier, vol. 31(3), pages 401-417, December.
    2. Itoh, Hideshi, 1994. "Job design, delegation and cooperation: A principal-agent analysis," European Economic Review, Elsevier, vol. 38(3-4), pages 691-700, April.
    3. Itoh, Hideshi, 1991. "Incentives to Help in Multi-agent Situations," Econometrica, Econometric Society, vol. 59(3), pages 611-636, May.
    4. Glenn MacDonald & Leslie M. Marx, 2001. "Adverse Specialization," Journal of Political Economy, University of Chicago Press, vol. 109(4), pages 864-899, August.
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    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions

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