Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5057956 | Economics Letters | 2016 | 4 Pages |
Abstract
â¢We study head starts in dynamic two-player tournaments a la Lazear and Rosen (1981).â¢A principal values aggregate effort and the highest effort exerted by the players.â¢It is always optimal to bias the tournament by awarding a head start.â¢A small head start increases the highest effort without decreasing aggregate effort.
In promotion contests or other tournament-like situations, a principal may attach some value to the highest effort expended by an agent. We show that whenever agents interact over multiple periods, awarding a head start to one of them is optimal even with completely symmetric agents. Awarding a small head start increases maximum individual effort without decreasing aggregate effort.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Philipp Denter, Dana Sisak,