|
|
|
|
||||
|
||||
Contests for StatusBenny MoldovanuUniversity of Bonn - Chair of Economic Theory II; Centre for Economic Policy Research (CEPR) Aner SelaBen-Gurion University of the Negev - Department of Economics; Centre for Economic Policy Research (CEPR) Xianwen ShiUniversity of Toronto - Department of Economics July 2005 Abstract: We study the optimal design of organizations under the assumption that agents in a contest care about their relative position. A judicious definition of status categories can be used by a principal in order to influence the agents' performance. We first consider a pure status case where there are no tangible prizes. Our main results connect the optimal partition in status categories to various properties of the distribution of ability among contestants. The top status category always contains an unique element. For distributions of abilities that have an increasing failure rate, a proliferation of status classes is optimal, while in other cases the optimal partition involves some coarseness. Finally, we modify the model to allow for status categories that are endogenously determined by monetary prizes of different sizes. If status is solely derived from monetary rewards, we show that the optimal partition in status classes contains only two categories.
Number of Pages in PDF File: 26 Keywords: Contests, status, normalized spacing, organization design JEL Classification: C7, D44 working papers seriesDate posted: August 2, 2005Suggested CitationContact Information
|
|
|||||||||||||||||||||||||||||||||||
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
FAQ
Terms of Use
Privacy Policy
Copyright
This page was processed by apollo7 in 0.469 seconds
