Ranking and Information

Marina Halac, Elliot Lipnowski and Daniel Rappoport
Additional contact information
Marina Halac: Yale University
Elliot Lipnowski: Columbia University
Daniel Rappoport: University of Chicago

No 2480, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: We study the design of a contest in which a designer uses performance-contingent rankings and information disclosure to motivate an agent to exert effort. The agent's ability is unknown, and the designer's objective is to maximize the agent's expected effort. We show that the optimal ranking is a simple "pass-fail" rule, and the optimal information policy provides the agent with the minimum information necessary to keep them motivated. The results have implications for the design of workplace evaluations, academic grading, and other competitive environments where relative performance is used to incentivize effort.

Pages: 64 pages
Date: 2025-12-15
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