Dynamically Sabotage-Proof Tournaments

Junichiro Ishida

Journal of Labor Economics, 2012, vol. 30, issue 3, 627 - 655

Abstract: This article explores the consequences of sabotage for the design of incentive contracts. The possibility of sabotage gives rise to a dynamic concern, similar to the Ratchet effect, which distorts the agents' incentives. We first show that the mere possibility of sabotage may make it impossible to implement the first-best effort, and we then offer two distinct incentive schemes, fast track and late selection, to circumvent this problem. The present model offers a mechanism through which these two schemes arise in a unified framework.

Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://dx.doi.org/10.1086/664945 (application/pdf)
http://dx.doi.org/10.1086/664945 (text/html)
Access to the online full text or PDF requires a subscription.

Related works:
Working Paper: Dynamically Sabotage-Proof Tournaments (2012)
Working Paper: Dynamically Sabotage-Proof Tournaments (2006)
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:ucp:jlabec:doi:10.1086/664945

Access Statistics for this article

More articles in Journal of Labor Economics from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().