Preemptive Behavior in Sequential-Move Tournaments with Heterogeneous Agents

Peter-Jürgen Jost and Matthias Kräkel

No 21/2004, Bonn Econ Discussion Papers from University of Bonn, Bonn Graduate School of Economics (BGSE)

Abstract: Rank-order tournaments are usually modeled simultaneously. However, real tournaments are often sequential. We show that agents’ strategic behavior in sequential-move tournaments significantly differ from the one in simultaneous-move tournaments: In a sequential-move tournament with heterogeneous agents, there may be either a first-mover or a second-mover advantage. Under certain conditions the first acting agent chooses a preemptively high effort so that the following agent gives up. The principal is able to prevent preemptive behavior in equilibrium, but he will not implement first-best efforts although the agents are risk neutral.

Keywords: preemption; tournaments (search for similar items in EconPapers)
JEL-codes: J3 M12 M5 (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (1)

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Journal Article: Preemptive behavior in sequential-move tournaments with heterogeneous agents (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:bonedp:212004

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