Dynamically Sabotage-Proof Tournaments
نویسنده
چکیده
This paper 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 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. JEL Classification Codes: J41; M12.
منابع مشابه
Dynamically Sabotage - Proof Tournaments May 10 , 2006
【キーワード】Sabotage; Tournament; Fast track; Late selection; Supermodularity; Submodularity 【要約】This paper examines a two-period tournament where agents may possibly engage in destructive sabotage activities. Under plausible circumstances, sabotage proves to be an effective tool for low-ability agents, especially when they are faced with high-ability agents. The possibility of sabotage then gives r...
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