Cheating and Enforcement in Asymmetric Rank-Order Tournaments

Imperfect monitoring of actions in rank-order tournaments makes it possible that undesirable but output-enhancing activities, such as cheating, may occur. Cheating may be especially tempting when one player has an advantage over another. We show that when audit probabilities are low, the leading player has more incentive to cheat; when audit probabilities are high, the incentive is reversed. Furthermore, we show that "correlated" audits are more e¤ective at decreasing the frequency of cheating than independent audits. Finally, we show that di¤erential monitoring schemes, where contestants are audited based on either their initial position or …nal ranking, more e¢ ciently achieve full deterrence than schemes which monitor contestants with equal