“Yes-Men in Tournaments

Ingmar Nyman () and Jason Cummins ()

No 417, Economics Working Paper Archive at Hunter College from Hunter College Department of Economics

Abstract: We study a rank-order tournament in which employees acquire and use private information for an investment decision. In this environment, competition for promotion can turn employees into "yes men" who make investment decisions that excessively agree with their supervisor's preconceived notions. Employees become "yes men" when their supervisor's prior opinion is strong and the parties receive little subsequent information. In response to this inefficiency, the firm may intensify the tournament's incentives (e.g., increase the wage raise from promotion), increase the correlation of employees' information (e.g., use tournaments for employees handling similar tasks), reduce the importance of any individual supervisor's prior opinion (e.g., evaluate employees using a committee), or use a different incentive mechanism altogether (e.g., individual contracts).

Keywords: Tournaments; Information Aggregation; Conformity (search for similar items in EconPapers)
JEL-codes: D82 J33 M51 (search for similar items in EconPapers)
Date: 2007
New Economics Papers: this item is included in nep-lab
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Journal Article: Yes Men in Tournaments (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:htr:hcecon:417

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