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Optimal sorting in group contests with complementarities

Author

Listed:
  • Philip Brookins

    () (Department of Economics, Florida State University)

  • John Lightle

    () (Department of Economics, Florida State University)

  • Dmitry Ryvkin

    () (Department of Economics, Florida State University)

Abstract

Contests between groups of workers are often used to create incentives in organizations. Managers can sort workers into groups in various ways in order to maximize total output. We explore how the optimal sorting of workers by ability in such environments depends on the degree of effort complementarity within groups. For moderately steep costs of effort, we find that the optimal sorting is balanced (i.e., minimizing the variance in ability between groups) when complementarity is weak, and unbalanced (i.e., maximizing the variance in ability) when complementarity is strong. However, when the cost of effort is sufficiently steep, the optimal sorting can be unbalanced for all levels of complementarity or even alternate between unbalanced and balanced as the level of complementarity increases.

Suggested Citation

  • Philip Brookins & John Lightle & Dmitry Ryvkin, 2014. "Optimal sorting in group contests with complementarities," Working Papers wp2014_09_01, Department of Economics, Florida State University.
  • Handle: RePEc:fsu:wpaper:wp2014_09_01
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    References listed on IDEAS

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    Cited by:

    1. repec:eee:jeborg:v:152:y:2018:i:c:p:64-80 is not listed on IDEAS
    2. Philip Brookins & John P. Lightle & Dmitry Ryvkin, 2015. "The effects of communication and sorting on output in heterogeneous weak-link group contests," Working Papers wp2014_01_01, Department of Economics, Florida State University.
    3. Gregor, Martin, 2015. "Task divisions in teams with complementary tasks," Journal of Economic Behavior & Organization, Elsevier, vol. 117(C), pages 102-120.

    More about this item

    Keywords

    group contest; complementarity; sorting; heterogeneity;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics

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