Divide and Conquer
Zhijun Chen ()
Labor and Demography from University Library of Munich, Germany
Tournaments are well known to be vulnerable to collusion as shown by the impossibility theorem in Ishiguro (2004), which asserts that efficient effort levels are impossible to be implemented through a collusion-proof contract. However, we argue that this impossibility is a product of simple mechanisms that prevail in collusion-proof mechanism design. In this paper, we explore more sophisticated mechanisms with discrimination and asymmetric information to prevent collusion, outlining the principle of “divide and conquer”. As a result, we establish a possibility theorem of implementing efficient effort levels, and thus break down the impossibility theorem in Ishiguro (2004).
Keywords: Collusion; Discrimination; Moral Hazard; Tournament Model (search for similar items in EconPapers)
JEL-codes: D20 J30 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mic
Note: Type of Document - pdf; pages: 21
References: Add references at CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpla:0504012
Access Statistics for this paper
More papers in Labor and Demography from University Library of Munich, Germany
Bibliographic data for series maintained by EconWPA ().