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Full-Text Articles in Social and Behavioral Sciences
Optimal Scrutiny In Multi-Period Promotion Tournaments, Pradeep Dubey, Ori Haimanko
Optimal Scrutiny In Multi-Period Promotion Tournaments, Pradeep Dubey, Ori Haimanko
Cowles Foundation Discussion Papers
Consider a principal who hires heterogeneous agents to work for him over T periods, without prior knowledge of their respective skills, and intends to promote one of them at the end. In each period the agents choose effort levels and produce random outputs, independently of each other, and are fully informed of the past history of outputs The principal’s major objective is to maximize the total expected output, but he may also put some weight on detecting the higher-skilled agent for promotion. To this end, he randomly samples n out of the T periods and awards the promotion to the …
Competitive Prizes: When Less Scrutiny Induces More Effort, Pradeep Dubey, Chien-Wei Wu
Competitive Prizes: When Less Scrutiny Induces More Effort, Pradeep Dubey, Chien-Wei Wu
Cowles Foundation Discussion Papers
We consider a principal who is keen to induce his agents to work at their maximal effort levels. To this end, he samples n days at random out of the T days on which they work, and awards a prize of B dollars to the most productive agent. The principal’s policy ( B,n ) induces a strategic game Γ( B,n ) between the agents. We show that to implement maximal effort levels weakly (or, strongly) as a strategic equilibrium (or, as dominant strategies) in Γ( B,n ), at the least cost B to himself, the principal must choose a small …