Tournaments with Ex Post Heterogeneous Agents

Theofanis Tsoulouhas and Kosmas Marinakis

Economics Bulletin, 2007, vol. 4, issue 41, 1-9

Abstract: This paper compares relative performance evaluation via tournaments to absolute performance evaluation via piece rates when agents are heterogeneous ex post, to make the point that agent heterogeneity compromises the insurance function of tournaments. In particular, we show that the more heterogeneous agents are the less insurance can be offered through tournaments and the less dominant tournaments are over piece rates. Thus, absolute performance piece rates should be preferred when agents are highly heterogeneous. However, even with heterogeneous agents, tournaments become more desirable when the number of agents or the uncertainty about the common shock increases sufficiently.

Keywords: piece; rates (search for similar items in EconPapers)
JEL-codes: D8 (search for similar items in EconPapers)
Date: 2007-10-30
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://www.accessecon.com/pubs/EB/2007/Volume4/EB-07D80009A.pdf (application/pdf)

Related works:
Working Paper: Tournaments with Ex Post Heterogeneous Agents (2007)
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:ebl:ecbull:eb-07d80009

Access Statistics for this article

More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().