Information Policy in Tournaments with Sabotage

Sabotage is one of the main problems of tournament-like reward schemes. Workers who are leading in a tournament are more dangerous rivals, and are therefore sabotaged more heavily. This implies that there is an extra cost to becoming a leader and, hence, to choosing high productive effort in the ear...

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Bibliographic Details
Published inThe Scandinavian journal of economics Vol. 115; no. 3; pp. 932 - 966
Main Authors Gürtler, Oliver, Münster, Johannes, Nieken, Petra
Format Journal Article
LanguageEnglish
Published Oxford Blackwell Publishing Ltd 01.07.2013
Blackwell Publishing
Subjects
C91
D83
Economic behaviour
Economic theory
Experiment
Information analysis
Information management
Information policy
J33
Leadership
M12
M51
M52
Problem solving
Productivity
Sabotage
Studies
tournament
Tournaments & championships
Workers
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Summary:Sabotage is one of the main problems of tournament-like reward schemes. Workers who are leading in a tournament are more dangerous rivals, and are therefore sabotaged more heavily. This implies that there is an extra cost to becoming a leader and, hence, to choosing high productive effort in the early stages of a tournament. The incentives to exert productive effort are thereby reduced. We show that this problem can be solved by concealing intermediate information on the performances of workers (i.e., by clever information management). Moreover, we offer experimental evidence indicating that such information management does increase productive efforts.
Bibliography:ark:/67375/WNG-Q2FMVRG8-F
ArticleID:SJOE12019
We would like to thank Edward Lazear, Christian Lucas, Gil Skillman, Dirk Sliwka, and two anonymous referees for helpful comments. We are grateful to Naum Kocherovskiy for programming the experimental software. Financial support from the Deutsche Forschungsgemeinschaft (DFG), in particular grants KR 2077/2-3 and SFB/TR 15, is gratefully acknowledged.
istex:8E2A9DE7A3FB969E64F1D717617B8CF647EEE735
Deutsche Forschungsgemeinschaft (DFG) - No. KR 2077/2-3
We would like to thank Edward Lazear, Christian Lucas, Gil Skillman, Dirk Sliwka, and two anonymous referees for helpful comments. We are grateful to Naum Kocherovskiy for programming the experimental software. Financial support from the Deutsche Forschungsgemeinschaft (DFG), in particular grants KR 2077/2‐3 and SFB/TR 15, is gratefully acknowledged.
ObjectType-Article-2
SourceType-Scholarly Journals-1
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ISSN:0347-0520
1467-9442
DOI:10.1111/sjoe.12019