Evaluation and Assignment with Networked Competition and Spillovers

Antonio Cabrales and Wenhao Cheng

No 21741, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper studies how organizations should jointly design evaluation rules and assign workers when performance depends on both effort and non-discretionary advantage. Agents choose effort in positions linked by a competition network, while their effective advantage depends on own type and spillovers through a second network. The planner chooses both the assignment and the effort weight in evaluation. Equilibrium effort rises with a position’s Katz-Bonacich centrality and falls with effective advantage. The optimal evaluation rule generally differs from true output. When effort is more important in production, the planner lowers the effort weight and uses negative assortative assignment to strengthen incentives. When advantage is more important, the planner raises the effort weight and uses positive assortative assignment to exploit spillovers. We also study a constraint requiring assignments to be pairwise stable, which creates an output loss depending on the intensity of competition.

JEL-codes: C72 D23 D85 J33 M52 (search for similar items in EconPapers)
Date: 2026-07
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP21741 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:21741

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP21741

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().