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Rank-Order Tournaments and Selection

Author

Listed:
  • Clark, D.J.
  • Riis, C.

Abstract

Rank order tournaments are often presented as incentive devices: a tournament in which the hardest working individual gains promotion to the next level in a firms' hierarchy may induce workers to exert extra effort for example. In this paper, we consider a tournament in which workers are expected to be heterogenous, so that the principal cares about who is promoted, worker ability is, however, unknown to the principal.

Suggested Citation

  • Clark, D.J. & Riis, C., 1996. "Rank-Order Tournaments and Selection," Memorandum 27/1996, Oslo University, Department of Economics.
  • Handle: RePEc:hhs:osloec:1996_027
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    References listed on IDEAS

    as
    1. Lazear, Edward P & Rosen, Sherwin, 1981. "Rank-Order Tournaments as Optimum Labor Contracts," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 841-864, October.
    2. Baker, George P & Jensen, Michael C & Murphy, Kevin J, 1988. " Compensation and Incentives: Practice vs. Theory," Journal of Finance, American Finance Association, vol. 43(3), pages 593-616, July.
    3. Margaret A. Meyer, 1991. "Learning from Coarse Information: Biased Contests and Career Profiles," Review of Economic Studies, Oxford University Press, vol. 58(1), pages 15-41.
    4. 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.
    5. Green, Jerry R & Stokey, Nancy L, 1983. "A Comparison of Tournaments and Contracts," Journal of Political Economy, University of Chicago Press, vol. 91(3), pages 349-364, June.
    6. Richard L. Fullerton & R. Preston McAfee, 1999. "Auctioning Entry into Tournaments," Journal of Political Economy, University of Chicago Press, vol. 107(3), pages 573-605, June.
    7. Taylor, Curtis R, 1995. "Digging for Golden Carrots: An Analysis of Research Tournaments," American Economic Review, American Economic Association, vol. 85(4), pages 872-890, September.
    8. O'Keeffe, Mary & Viscusi, W Kip & Zeckhauser, Richard J, 1984. "Economic Contests: Comparative Reward Schemes," Journal of Labor Economics, University of Chicago Press, vol. 2(1), pages 27-56, January.
    9. Canice Prendergast, 1993. "The Role of Promotion in Inducing Specific Human Capital Acquisition," The Quarterly Journal of Economics, Oxford University Press, vol. 108(2), pages 523-534.
    10. Derek Clark & Christian Riis, 2001. "Rank-order tournaments and selection," Journal of Economics, Springer, vol. 73(2), pages 167-191, June.
    11. Bull, Clive & Schotter, Andrew & Weigelt, Keith, 1987. "Tournaments and Piece Rates: An Experimental Study," Journal of Political Economy, University of Chicago Press, vol. 95(1), pages 1-33, February.
    12. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Derek Clark & Christian Riis, 2007. "Contingent payments in selection contests," Review of Economic Design, Springer;Society for Economic Design, vol. 11(2), pages 125-137, September.
    2. Laurent Franckx & Isabelle Brose, 2004. "A theoretical framework for incentives in the public sector," Economics Bulletin, AccessEcon, vol. 10(2), pages 1-8.
    3. Oliver Gürtler, 2005. "Are 18 holes enough for Tiger Woods?," Bonn Econ Discussion Papers bgse5_2005, University of Bonn, Germany.
    4. Marc Gürtler & Oliver Gürtler, 2015. "The Optimality of Heterogeneous Tournaments," Journal of Labor Economics, University of Chicago Press, vol. 33(4), pages 1007-1042.
    5. Münster, Johannes, 2006. "Selection tournaments, sabotage, and participation
      [Auswahlturniere, Sabotage und Teilnahme]
      ," Discussion Papers, Research Unit: Market Processes and Governance SP II 2006-08, Social Science Research Center Berlin (WZB).
    6. Oliver Gürtler, 2010. "Collusion in homogeneous and heterogeneous tournaments," Journal of Economics, Springer, vol. 100(3), pages 265-280, July.
    7. Gürtler, Oliver, 2005. "Are 18 holes enough for Tiger Woods?," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 44, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    8. Ewerhart, Christian, 2016. "An envelope approach to tournament design," Journal of Mathematical Economics, Elsevier, vol. 63(C), pages 1-9.
    9. Kräkel, Matthias & Schöttner, Anja, 2012. "Internal labor markets and worker rents," Journal of Economic Behavior & Organization, Elsevier, vol. 84(2), pages 491-509.
    10. repec:ebl:ecbull:v:10:y:2004:i:2:p:1-8 is not listed on IDEAS
    11. Derek Clark & Christian Riis, 2001. "Rank-order tournaments and selection," Journal of Economics, Springer, vol. 73(2), pages 167-191, June.
    12. Clark, Derek J. & Riis, Christian, 2000. "Allocation efficiency in a competitive bribery game," Journal of Economic Behavior & Organization, Elsevier, vol. 42(1), pages 109-124, May.
    13. Kawamura, Kohei & Moreno de Barreda, Inés, 2014. "Biasing selection contests with ex-ante identical agents," Economics Letters, Elsevier, vol. 123(2), pages 240-243.
    14. Münster, Johannes, 2006. "Selection Tournaments, Sabotage, and Participation," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 118, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.

    More about this item

    Keywords

    ENTREPRISES; WORKERS; PROMOTION;

    JEL classification:

    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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