References (30)



Dynamically Sabotage-Proof Tournaments

Junichiro Ishida

Osaka University - Institute of Social and Economic Research

March 26, 2012

ISER Discussion Paper No. 838

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.

Number of Pages in PDF File: 34

Keywords: Sabotage, Tournament, Fast track, Late selection

JEL Classification: J41;M12.

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Date posted: March 26, 2012  

Suggested Citation

Ishida, Junichiro, Dynamically Sabotage-Proof Tournaments (March 26, 2012). ISER Discussion Paper No. 838. Available at SSRN: http://ssrn.com/abstract=2029360 or http://dx.doi.org/10.2139/ssrn.2029360

Contact Information

Junichiro Ishida (Contact Author)
Osaka University - Institute of Social and Economic Research ( email )
6-1 Mihogaoka
Ibaraki, Osaka 567-0047
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